Days after ITWeb reported South African businesses had little interest in investigating energy-efficient technology, Eskom says it hopes to raise electricity prices by 18%.
An article posted on FIN24 yesterday quotes the utility's MD of resources and strategy, Dr Steve Lennon, defending the hike as reasonable considering the rising price of coal, increasing input costs and the organisation's R150 billion capital expenditure plan.
This morning, Eskom spokesperson Fani Zulu said the price hike would have an added benefit of increasing consumption awareness among businesses and consumers alike.
"SA's electricity prices are [currently] not cost-reflective. As a result, electricity is inefficiently used by the market and pressure is placed on Eskom to meet demand. This increase will be a message to the market that it needs to be more aware of its consumption and that it needs to find ways of introducing energy-efficient technologies," he explains.
ITWeb's readers criticised Eskom's supply planning and its impact on electricity availability. They also criticised businesses for being greedy and inconsiderate of consumer requirements.
One reader notes that home users are trying to save electrical resources, but could land up suffering the consequences of power outages because power-hungry companies are less responsive to the situation.
Another reader suggests raising the price of electricity would give power-hungry companies an incentive to explore alternate sources.
Sun Microsystems' regional director for sub-Saharan Africa, Vito Bonafede, agrees: "I think the day that we start feeling a little pain, we will see action starting to take place. Perhaps this price hike, together with the power shortages expected this winter, will provide consumers and companies with the motivation to reconsider their efforts to reduce consumption."
Not immediate
However, the rate hike is unlikely to hit the market this year. Zulu explains Eskom has entered a multi-year price determination programme with the National Energy Regulator and the earliest it is likely to appear is 1 April 2008.
This doesn't mean companies should wait for the hike before taking action, he adds.
"We have several programmes in place to address supply shortages. But there is a responsibility for the demand side to take its own action. Eskom has both incentives and programmes to help companies look at their environments and develop plans to reduce consumption," he says.
Meanwhile, Bill Lacey, economic consultant to the South African Chamber of Business, says he expects business to sit up and take note of their consumption.
"Business is very concerned about power availability following the shortages experienced throughout the country. And many companies have introduced contingency plans as result. However, business is less concerned about consumption and a price hike could be the motivation required to look internally for savings," he explains.
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