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The South African Institute of Electrical Engineers“Dedicated to the interest of professionalElectrical and Electronic Engineering in South Africa”SAIEE is keeping a watchfuleye on the electricity sectorThe second Integrated Resource Planfor Electricity (IRP-E 2) was due tobe published in August this year but hasbeen delayed and will only be publishedin September or October according to theNational Electricity Regulator of SouthAfrica (Nersa).The Department of Energy hand-pickeda task team of large consumers, academicsand experts to help it devise the plan andthen swore each one of these members tosecrecy.Their first task is apparently to deliver29 parameters that could be used to drawup the plan. Why 29 nobody knows (exceptperhaps the task team and they are notsaying).A paper reviewing progress on the secondMulti-Year Price Determination (MYPD-2),by immediate Past President of the SouthAfrican Institute of Electrical Engineers,du Toit Grobler, was presented at theannual South African Revenue ProtectionAssociation’s symposium in Johannesburgin July.He points out that there are a numberof anomalies in South Africa’s energy sectorsuch as the government’s commitmentin 2000 to the provision of free basic electricityand water to every household in thecountry. Grobler claims that while this isa noble goal, the reality is that it detractsfrom effort to promote energy efficiencyamong users, especially when it is seenagainst the background of penalisinglarger household consumers by implementinghigher block tariffs.To further complicate matters,large industrial consumers of electricityenjoy discounted tariffs while domesticconsumers who exceed certainlimits are penalised through inflatedtariffs.When the application by Eskomwas submitted to Nersa earlier thisyear, the SAIEE attended the publichearings and made a number offormal submissions to the regulatorobjecting to the increases and makingalternative suggestions.Among others, the SAIEE contended thathigh energy users in industry were effectivelybeing subsidised by other users and this wasunfair. It called for the electricity prices tobe market related and there should not be‘special tariffs’ such as those applicable toBHP Billiton for its aluminium smelters asthis distorts the electricity market.Grobler points out that the SAIEEwas severely criticised for its comments.However, Eskom has held protractednegotiations with major users, includingBHP Billiton and Anglo American in a bidto standardise tariffs for all customers.The SAIEE also contended that thoseindustrial concerns that generate surplusenergy during normal production processesshould be able to sell the surplus at apredetermined price through PowerPurchase Agreements.Grobler says that there has been someprogress on concluding such agreements butthese have not yet been finalised, resultingin the fact that available generating plants,such as the IPSA gas-fuelled power stationin Newcastle remain idle.During the public hearings the SAIEEwarned that higher electricity prices wouldincrease energy theft with the concomitantrisk to human life.The institute was severely criticised byEskom for these comments.Grobler says that the SAIEE’s contentionhas proven to be accurate and EnergyMinister, Dipuo Peters told Parliamentthat the country’s municipalities lose morethan five percent of their annual turnoverbecause of energy theft.In reply to a Parliamentary question,Peters said that up to 50 percent of the 5850 GW hours of Eskom’s losses in the2008/09 financial year appeared to be theresult of energy theft.This was compounded by the copper cablethefts that cost the South African economyR7-billion a year.Apart from the cost of cable andelectricity theft on the economy, the SAIEEpointed out at the public hearings thatmunicipalities around the country addfurther layers of inefficiency to the processesof delivering electricity to the consumer andthat the impact of this is that consumersend up subsidising such inefficiency.There has been some debate over dividingSouth Africa into two time zones (East andWest) as this will help to spread the peakenergy demand and relieve some of thepressure on Eskom’s reserve margin butthere has been no progress on this mattereven though it could result in electricitysavings of between 0,5 percent and 2,6percent in the maximum demand.The SAIEE also recommend that Nersamonitor the consumer price of electricityto ensure that consumers (whether bulk,industrial or domestic) are not subjected tounreasonable profits being made by Eskomor any other organisations involved in theelectricity supply chain.Grobler points out that the SAIEE iscontinuing to monitor developments withinNersa, the Department of Energy and withinany other stakeholder in the electricityarena. It is also actively taking part in thework of the National Planning Commissionand is contributing to the formulation of theMYPD-3, which is due to be published in2012.50