Eskom deal out of Nersa’s hands
A deal that Eskom signed in the 1990s with mining company BHP Billiton will continue at least until 2028.
|||Cape Town - A deal Eskom signed in the 1990s with mining company BHP Billiton to supply it with low-cost electricity for its Hillside smelter in KwaZulu-Natal would continue at least until 2028.
Eskom complained to the National Energy Regulator of South Africa (Nersa), demanding that it be freed from the onerous supply contract.
Read: Nersa explains 9.4% Eskom power hike
Recently, Nersa approved an average tariff increase of 9.4 percent for 2016/17. With R10.2 billion of this expected to come from standard tariff customers, and R983 million from Eskom’s special pricing agreements with the likes of BHP Billiton and international customers.
Yesterday, Nersa’s head of electricity regulation Thembani Bukula told the portfolio committee on energy that Eskom’s tussle over the contract with BHP Billiton was going to be “a long, legal process”.
“As BHP Billiton would want it, they would draw out a clause in their confidential agreement, whereby they take you to court. It’s taken us two years to get to the point whether we can publish certain parts of their contract, which really deals with the pricing and how it was structured,” said Bukula.
He said Nersa could not revoke the contract the two parties had entered.
Earlier The DA’s Pieter van Dalen asked Nersa whether Eskom’s cost overruns, which led to price increases, had any relation to the delays in commissioning the Medupe and Kusile power stations.
Bukula said the 800MW unit at Medupe, which was supposed to have come on line in August last year, would have generated close to 2 468GW hours of electricity.
Bukula said using the coal-fired plant had reduced Eskom’s cost-overruns from R8bn, which it cost to run diesel-powered open cycle gas turbines, to R1.2bn.
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