Electricity Crisis

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EE-News News and announcements from EE Publishers Issue 21, April 2008 This article, to be published in the April 2008 issue of Energize magazine, is distributed for substantive comment and response by readers, which may be done simply by replying to this email. The impact of electricity theft and non-payment on the generation capacity crisis in South Africa by Chris Yelland CEng, managing editor, EE Publishers This article argues that the impact of electricity theft and non-payment in South Africa on the national electricity demand is about 3600 MW, which is equivalent to the output of a major coal-fired power station, or about 10% of the current national demand of around 36 000 MW. Therefore, it seems to me quite extraordinary and administratively unjust that paying customers and the productive sectors of the economy should be summarily cut off through "pre-emptive" load-shedding and forced load reductions, before reasonable efforts have been taken to cut off electricity supply to the thieves and non-payers first. Yet, in the last six months of the generation capacity crisis, I have not heard a single public word or pronouncement by the powers that be in central and local government, NERSA, EDI Holdings, Eskom and the municipal electricity distributors, about the theft and non-payment problem. It is as though this problem simply does not exist. It is clear that a high-level national action plan and campaign is required, involving the Treasury, DME, DPE, DPLG, NERSA, EDI Holdings, Eskom, SALGA, AMEU, all electricity distributors and SARPA (South African Revenue Protection Association), directed against electricity theft and non-payment. The campaign should enjoy at least equal prominence, significance, importance and management commitment to the current DSM and energy efficiency programmes. The scale of electricity theft and non-payment in South Africa Eskom's "non-technical losses" (read: electricity revenue lost as a result of theft, bypassing of meters, fraud, etc.) amounted to 5105 GWh for the financial year ending 31 March 2007, while arrear debt for this period (read: provision for unpaid electricity supplied and billed to customers operating a credit account with Eskom to be written off) amounted to some 1000 GWh [Ref. 1]. Eskom's total electricity losses due to theft and non-payment are thus 6105 GWh per annum. As Eskom and municipal electricity distributors have similar numbers of residential customers (Eskom: 48.3%; municipal distributors: 51,7%), and also similar overall numbers of customers (Eskom: 47,2%; municipal distributors: 52,8%) [Ref. 2], it may be fair to assume that the scale of theft and non-payment in the municipal sector is similar to that of Eskom. In proportion to their number of customers, electricity theft and non-payment for municipal distributors is thus estimated to be 6829 GWh per annum (Note 1), and the total national figure (i.e. Eskom plus municipal distributors) thus amounts to 12 934 GWh per annum (Note 2). The impact of electricity theft and non-payment on the national demand The average annual demand corresponding to theft and non-payment of 12 934 GWh per annum is 1476 MW (Note 3). To obtain the corresponding peak demand, the average demand must be divided by the load factor, noting that, by definition, the load factor is the average demand divided by the peak demand. There will of course be some debate on the appropriate load factor to be used, which depends on the mix of customer categories involved in the theft and non-payment, as well as the diversity of the resulting demand with the rest of the system. A load factor of 0,3 would be appropriate for rural residential loads, a load factor of 0,4 for urban residential loads, and a somewhat higher value for commercial and manufacturing loads. Noting that some 95% of all Eskom and municipal electricity customers are in the residential sector [Ref. 2], a load factor of 0,4 has been assumed. This gives a peak demand of 3690 MW corresponding to the average demand of 1476 MW (Note 4). This is equivalent to the output of a major coal-fired power station, or about 10% of the current national demand of about 36 000 MW. The financial impact of electricity theft and non-payment Based on Eskom's average residential selling price of about R0,42 per kWh (Note 5) [Ref. 3], the impact of lost revenue of the electricity distribution industry due to theft and unpaid electricity of 12 934 GWh per annum is about R5,34-billion per annum. One could argue that a value lower than R0,42 per kWh should be used, but this does not materially change things, as indicated below. A further financial impact is the capital cost of a new 3600 MW "six-pack" coal-fired power station, estimated at R50-billion, which would otherwise not be required. Again one can argue about whether this should be some kind of peaking plant, open or combined cycle gas turbine plant, or even nuclear power plant. Finally there is the enormous cost of unserved energy to the productive economy resulting from pre-emptive load-shedding and involuntary load reductions caused by inadequate generation capacity due to electricity theft, noting also that if there was no loss of electricity to theft or non-payment, load shedding and load reductions would in fact not be required. To establish the actual cost of unserved energy, first you will have to get Eskom to disclose the expected energy reduction (kWh) per annum that is being forced on mining, industrial, commercial, agricultural and traction customers throughout the country as a result of a generation capacity shortage of 3600 MW due to electricity theft. Then multiply this figure by R75 per kWh, this being the cost of unserved energy currently used in Eskom's Integrated Strategic Electricity Planning (ISEP) process. This will give you the cost impact of unserved energy on the productive economy per annum. Eskom knows all these figures, but good luck in trying to obtain them! However, as an example, let us just say that the unserved energy to the mining, industrial, commercial, agricultural and traction sectors resulting from load-shedding and involuntary load reductions were to be only 25% of the electricity stolen per annum (i.e. 2700 GWh), then the economic impact to the productive sector of this unserved energy would be R200-billion per annum. And we should also not forget the loss to the fiscus of the company and value added tax resulting from all of the above! The bottom line The bottom line is that in the era of serious generation capacity shortages in which we find ourselves for the next ten years, the financial impact of electricity theft and non-payment is staggering, and gets to the very heart of the sustainability of the electricity distribution industry in South Africa. The excuses Of course, I am expecting some nitpicking over the facts, assumptions and calculations presented, none of which, however, will change the stark reality and broad picture presented. Similarly, there is going to be some wringing of hands and bleating about the general levels of poverty, the so-called culture of non-payment, and the lack of commitment and resources from the political leadership, government, police and justice departments in South Africa in routing out the thieves. In fact, there will undoubtedly be all manner of excuses from those involved, as they try to deflect culpability and shift the blame from where it really belongs when there is such a clear business case - namely the executive management of Eskom and the municipal electricity distributors in South Africa. A local benchmark Whilst electricity theft and non-payment is not restricted only to the residential sector, Eskom acknowledges that for its residential customer class, the level of electricity theft (i.e. kWh stolen) amounts to 27% of the total electricity supplied (ie. kWh sold plus kWh stolen) to this sector. This also means that in this sector, Eskom's electricity lost to theft amounts to 43% of electricity sales! But what should we be expecting from a properly managed electricity distributor in respect of its levels of theft and non-payment? As a local benchmark, we can look to Khayelitsha, a severely disadvantaged, poverty stricken and largely residential urban community within the Cape Town metropolitan area. Its electricity distributor, PN Energy Services (Pty) Ltd, was originally formed as a joint venture by Eskom, EDF (France) and East Midlands Electricity (UK) for the electrification of Khayelitsha and the management of the township's electricity distribution business, infrastructure, metering and revenue collection systems, and network maintenance. Since 2007, the company has been fully owned by Eskom. With a business model somewhat unique in South Africa, PN Energy Services' dedicated management has driven non-technical losses down to some 3%. This has been done through its own internal efforts, without any external or preferential support or funding from government and/or the law enforcement authorities. This notable achievement simply results from the business imperatives applicable to a relatively small, ring-fenced private company, coupled with clear management accountability, and good business and revenue protection practices. In the process, PN Energy Services has become the only electricity distributor amongst the six large Eskom and 150 municipal electricity distributors that has an IS0 9000 quality management system in place! A proposed plan To deal with this enormous national problem, I propose a high-profile national campaign, with significant penalties and rewards (i.e. strong incentive based regulation), led by the Treasury and involving the DME, DPE, DPLG, NERSA, EDI Holdings, Eskom, SALGA, the AMEU and all municipal distributors, to reduce levels of electricity theft and non-payment ten-fold over a period of five years. To this end, I propose that electricity distributors should set aside a budget totaling R20-billion, made up of R4-billion per annum for five years. The campaign, led from the top and directed at the thieves, should enjoy at least an equal profile, significance, importance and management commitment to the current DSM and energy efficiency programmes that are directed at paying customers. I believe that the positive outcomes of such a plan would come at a fraction of the cost and in a fraction of the time required to build equivalent new generation capacity, and like DSM and energy efficiency, would thus make a meaningful contribution to addressing the current generation capacity crisis in South Africa, while also ensuring the sustainability of the electricity distribution industry. Conclusion Is the achievement of non-technical losses of 3% of energy delivered just a dream, or is this a practical and achievable target, given serious, high-level management commitment, adequate resources and sufficient budget over a period of five years? The example of Khayelitsha and PN Energy Services clearly indicates that the target is certainly achievable, and that electricity theft is in fact not caused by poverty, a culture of non-payment, or a weak commitment by government enforcement agencies, as is so often claimed. On the contrary, I believe that that the scale of electricity theft and non-payment in South Africa has been caused by management complacency over many years since Eskom's low-cost mass electrification programme started in 1991. To put it kindly, I believe it is fair to say that revenue protection by Eskom and municipal electricity distributors in South Africa is being applied in ways that are too "user-friendly" towards the electricity thieves! This is quite clearly a management problem, or shall we rather say, a problem of mismanagement. Notes (1) Municipal distributor losses p.a. = (52,8 / 47,2) x 6105 = 6829 GWh p.a. (2) Total Eskom and municipal distributor losses = 6105 + 6829 = 12 934 GWh p.a. (3) Average demand p.a. = 12 934 000 / (365 x 24) = 1476 MW (4) Peak demand = Average demand / load factor = 1476 / 0,4 = 3690 MW (5) Average price to residential sector = Rand sales p.a. / energy sold p.a. = 4064 / 9736 = R0,417 per kWh References [1] Eskom email response to questions by EE Publishers, dated 9 April 2008 [2] NER Electricity Supply Statistics for 2004, page 23, Table 6.3 [3] Eskom 2007 Annual report, page 189, Table 4

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Alternative energy sources

With a website such as ours promoting alternative energy, energy management, generators and so on it follows that many sales people crawling the web approach us each day with their alternative electrical products. I am wondering just how much business my site actually brings in for me, however what is most apparent is the lack of technically proficient sales persons, I don,t know how many generator, inverter, and battery back up sales pitches I have listened too over the past three months. What I do know is ; BE CARE FULL. there are many emergency electrical back up products currently doing the rounds that will damage your current electronic equipment permanently. Be specific about what electrical loads you would like to supply continuously and for how long a period. Ask what type of sign wave your back up system is producing. If a TRUE SIGN WAVE is not specified chances are the equipment will be real cheap and will be producing a clipped, square or stepped sign wave which will, damage your equipment. Generators too come in different price brackets if they are the smaller portable units make sure that they have AVR equipment. Automatic Voltage Regulation as without this you will also expose your equipment to poor sign wave conditions, fluctuating frequency as well as fluctuating voltage. So cheap, as always does not exist and specifically in areas of power generation or elctricity storage and lets consider that the purchase of any such alternative power generation equipment in SA should be seen as a long term investment and not a temporary solution. Professional teams and technicians do exist so if you require a full audit on your home or office environment give us a call we will produce an audit on the connected load the critical load and advise as to what type of back up is required. We suggest energy saving initiatives with your lighting, control secondary equipment and so on. Remember though that we will promote a cleaner green sustainable solution and this is normally initially a little more expensive than some other offers you may receive.

SA In crisis

In the year 2007, the Lord came unto Noah, who was now living in
Branston in Johannesburg, and said, "Once again, the earth has become wicked and
> over-populated, and I see the end of all flesh before me. Build
another Ark and save 2 of every living thing along with a few good humans."
>
> He gave Noah the plans, saying, "You have 6 months to build the Ark
before I will start the Unending rain for 40 days and 40 nights."
>
> Six months later, the Lord looked down and saw Noah sweeping in his
yard - but no Ark.
>
> "Noah!" He roared , "I'm about to start the rain! Where is the Ark?"
>
> "Forgive me, Lord," begged Noah, "but things have changed. I needed a
> building permit. I've been arguing with the inspector about the need
for a sprinkler system. My neighbors claim that I've violated the
neighborhood zoning laws by building the Ark in my yard and exceeding the height
> limitations. We had to go to the Metro Council for a decision.
>
> Then Eskom demanded a bond be posted for the future costs of moving
power lines and other overhead obstructions, to clear the passage for the
Ark's move to the sea. I told them that the sea would be coming to us, but
they would hear nothing of it.
>
> Getting the wood was another problem. There's a ban on cutting local
trees because the Nature Conservation authorities say it will upset the
balance of the local ecological system.
>
> I tried to convince them that I needed the wood to save us all from
> extinction - but no go!
>
> When I started gathering the animals, the SPCA prosecuted me. They
insisted that I was confining wild animals against their will. They argued the
> accommodation was too restrictive, and it was cruel and inhumane to
put so many animals in a confined space.
>
> The traffic authorities said it would take six months after completion
of the ark to plan a route to the sea. I told them also that the sea
would be coming to my back yard. They threatened to have me committed.
>
> Then the Department for Environment ruled that I couldn't build the
Ark until I had arranged and conducted an environmental impact study on
your proposed flood.
>
> I'm still trying to resolve a complaint with the BEE group on how many
> affirmative action persons I'm supposed to hire for my building crew.
>
> The Department of The Interior has insisted that I provide them with a
list of the people who want to work so that they can check that they are
not from the non designated group.
>
> COSATU say I can't use my sons. They insist I have to hire only Union
> workers with Ark-building experience.
>
> To make matters worse, SARS seized all my assets, claiming I'm trying
to leave the country illegally with endangered species.
>
> So, forgive me, Lord, but it would take at least 10 years for me to
finish this Ark."
>
> Suddenly the skies cleared, the sun began to shine, and a rainbow
stretched across the sky.
>
> Noah looked up in wonder and asked, "You mean you're not going to
destroy the world?"
>
> "No," said the Lord.
>
> "The SA Government has beaten me to it."

Energy crisis

Eskom urges more power cuts
02/04/2008 14:11 - (SA)

Crisis 'won't stop power plans' Eskom to decide on power cuts Expect power cuts 3x a week Eskom turns down power request Miners make a plan on Eskom

Johannesburg - South Africa's power crisis may last many years unless there is a drop in demand for electricity, Eskom said on Wednesday.

A reduction in consumption should not damage the economy, it added.

Eskom is rationing power to households and reduced supply to big industrial customers from January after the energy grid came close to collapse.

The country's key mining sector, which includes the world's biggest platinum mines, is operating at 95% power supply.

Eskom CEO Jacob Maroga said South Africans could not only rely on efforts to boost capacity, and had to find ways to cut demand.

"If we only rely on (an increase in supply), the numbers are not looking good for many years," he told reporters, adding that reducing demand would not damage economic growth.

"Reducing energy consumption should not slow down the GDP growth."

However, the utility would welcome delays of major energy-intensive projects and developments, including smelters.

Maroga also said the company was in talks with mining companies on proposed electricity price increases, after it requested that the energy regulator approve a 53% tariff increase this year.

The proposed price hike, aimed to help finance spending of R343bn over the next five years to boost capacity, has been widely criticised and could add significantly to costs in a mining sector that has already been forced to lower output due to power constraints.

"We may have to raise our appetite for price," Maroga said, without giving further details on the talks with the mining sector, one of the cornerstones of the economy.

Power stations had about 12 days stockpiles of coal, he added. A shortage of coal, and ageing infrastructure at the company's power plants, has been a major cause of unplanned blackouts, leading to a scramble to secure more supplies.

Ostrich Wisdom

The Headmaster's Speech

I wanted to spend some time with you today reflecting on the last two or three months we have experienced as a nation. Some commentators have called this the “post-Polokwane Syndrome”, after the events at the ANC National Conference in December, the outcome of which many have seen as negative.

Added to this negative feeling, has been the electricity crisis, now seen as a result of poor planning by the state and acknowledged as such by President Mbeki in his State of the Nation address in Parliament, where he apologised to the nation.

Also knocking us have been higher world oil prices; higher interest rates in SA and the start of a world wide recession, particularly in the UK and the US with their major housing crisis. Added to these have been the on-going crime situation and negative press articles.

So, it is quite easy to fall into the trap of feeling and thinking negatively about our country.

In 1948, Alan Paton wrote his famous book “Cry the Beloved Country” and that title is perhaps still appropriate today, 60 years on, for obviously different reasons. How do we as passionate South Africans, react to this mood of despondency?

Well I cannot speak for you or tell you what to think but I can give you my perspective.
First of all, I make no apologies for being passionately South African.

Let me share this with you – I was not born in South Africa, I was born in East Africa (I moved here at the age of seven), so becoming a naturalised South African was a choice for me. It was a choice I made in the mid 1980s – a terrible time for South Africa – the country was in turmoil; we had sanctions; very low economic growth; the country was bankrupt; civil war was looming; there were bombs in schools; riots in the townships; young men, many of them my peers, fighting and dying on our borders. During that time, I gave up a British passport for a South African one.

Some might call that foolish. So be it.

I have never regretted that decision.

Why not? Not just because South Africa is such a beautiful country – it was because I believed in the people of this country and I believed that God had a plan for us. This was proved right for me when the miracle of 1994 happened. And it was a miracle.

All of you sitting here, matrics and younger, were born either in the year Madiba was released, in 1990, or afterwards. And most of our Grade 8s are “born-frees” – born in 1994 or afterwards and what a privilege that is!

As a passionate South African, here’s what gets me mad:

• The levels of violence and crime that have touched many of us – and many of you sitting here.
• As an adult, on behalf of all adults, I believe that we need to apologise to our youth for not doing more to protect you.
• I get mad when I visit black schools and see how little they have and how poor some of the teaching is.
• I get mad that there is still massive poverty in our country and an Aids pandemic.
• I get mad that there are some instances of incompetence when it comes to areas of social and service delivery.

But being mad about these issues doesn’t make me any less passionate about South Africa.

I especially get mad that some of our leaders lack moral standing – whether they be a judge, the top policeman or the top politicians.

To me the issue is not whether they are guilty in a court of law. For me, leaders should not be tainted by even a hint of corruption. Even that hint undermines a leader’s moral standing – and one should do the honourable thing and resign, in my opinion.

You see, to be a leader means to be a dealer, a purveyor and a deliverer of hope.

And it is our job – yours and mine – to be deliverers of hope. Because we believe in this school that all can and will lead and because I believe in the talent and potential of the young men sitting before me – I believe in that hope.

So am I optimistic? Yes.

I cannot believe that, after all we have been through as a nation, that a future Zimbabwe scenario is God’s plan for us.

Yes, I am optimistic because I believe that we have the people here in South Africa to overcome these challenges.

Stuart Pennington, author of the book and website “South Africa: The Good News” wrote last week: “I am in awe of the thousands of South Africans who toil to help the less fortunate.”
I would include in that statement honest policemen, hardworking nurses and teachers and all who work in community service projects, including all of you.

Yes, I am optimistic because I refuse to believe that we can continue to be held to ransom by a criminal minority.
Yes, I am optimistic because we are resilient and tough, as a people and a nation.
Yes, I am optimistic because I believe that the challenges ahead are surmountable, as we wage war against poverty and crime and corruption.
Let’s look at some of the facts not always highlighted by the media.

As we know, the media often focuses on the bad news because bad news sells.

So, when it comes to the economy, let’s remember that economies work in cycles – expansion; higher expenditure, the economy overheats and there is a readjustment (recession) which is normal.

It has happened before in South Africa – and has been worse – and will happen again. In 1989, the SA Government defaulted on its loan payments (i.e. was unable to pay its debts); the stock market crashed and the rand collapsed.

In 1998, interest rates hit 25%.

Are we better off now? – in a lot of ways we are.

• 1980s – 1% growth
• Early 1990s – SA was technically bankrupt – defined as when national debt is more than 3% of GDP – in 1994, it was 9%.
• During the Mandela years, we had 2% economic growth
• For the last seven years – 5%!
• Next year – 4% - despite world wide recession, oil prices, electricity crisis.
• JSE – 2001 – 8000 points and everyone was pleased; 2007 – 30 000 points (although it has lost some growth now)
• Platinum – up R5000/ounce since January
• Here’s a thought – with cuts of electricity, less platinum comes out of ground but what’s left is not going anywhere and while it stays in the ground, the price goes up!

What else is up?

• Business confidence (until January)
• Employment is up
• Number of houses built – up
• Tourists visiting – up
• Car sales:

20 000 per month in 2001 – everyone was pleased!
30 000 per month in 2007
Look at our budget, announced by Trevor Manuel on Wednesday. Tax income has gone from R188bn in 2000, to R660bn in 2007!

At the same time, he has cut personal tax and has not borrowed any money. The Americans are so envious of us.

Individual tax cuts - i.e. money given back to tax payers
2006 R12bn given back to individuals
2007 R8.4bn given back to individuals
2008 R7.2bn – in a supposed-to-be recession
This is a major achievement, particularly as in 2000, there was a R25bn deficit on the budget and for the last three years we have not had a deficit on the budget.

Money for housing for the poor has gone up
2000 R9bn
2007 R51bn
And we have built 2.6 million houses since 1996.

Yes, we have challenges:

Eskom is one of them and there is now a 2c levy on every kilowatt hour. But think about this

• Electricity was cheap, now we are paying more
• We had electricity cuts before. In 1981, there was no power in the whole country for 18 hours
• We are not the only country to have power cuts – New York; China – over Chinese New Year this year – 12 million people were left stranded.

There are other challenges

• The world oil price has gone from $60 per barrel in 2007 to $90 now and it is not coming down.
• We may be heading for a situation like the UK where they pay R15 per litre.
• HIV/Aids is another major concern, as we see fit to spend R17bn on the World Cup but less on handling this pandemic.

So what am I saying?

Yes there are concerns and challenges BUT there are also many positives.
There are no easy answers or solutions and 2008 will be tough.
However, we have had it tough before and we handled it and boom years will come again – such as in 2010.

So what do we do?

Emigrate? An option for some I suppose and I am always sad when I hear about people leaving.
But where to? Is it guaranteed that it will be all cherries and rose blossoms on the other side of the fence?

Or do we toughen up, get creative and get active, as the “new” South Africans?

By “getting creative,” I mean this – there are massive opportunities here and we will be more aware of issues, especially financially and environmentally.

Two thoughts by way of example:

• Next time there is a power cut and you can’t read e-mails, play computer games or watch TV – celebrate – you can instead talk to people – your family or colleagues.
• With regard to the environment, here is an example of being creative: water availability is always an issue in SA – did you know that the average house has 120 000 litres of water running off its roof every year in the form of rain water?

By “getting active,” I mean thinking about what we can do – like Trinity House holding their march on Tuesday; or writing letters; or petitions; or getting involved to help fix it.

Here is an excerpt from “African Wisdom” by Lanette Hattingh and Heinrich Claassen entitled The Ostrich Wisdom: Where is your head? When confronted with a setback you have two choices of action: you can bury your head in the sand like the ostrich and hope the problem will pass by, or you can stand tall and face the problem head on.
“We have one freedom inside us that nobody can take away, the freedom of reaction/attitude in any given circumstance.” (Viktor Frankl, the psychologist & concentration camp survivor.) Our reaction to a setback will determine if we are going to stay with our heads buried in the sand or look up and do something about it.

When storms of life pour down on you, it’s what happens within you that will determine what happens to you.

You have Mr Positive and Mr Negative doing constant battle in your head. Guess who wins? The one you feed the most! If your head is in the sand you can only see the dark and Mr Negative will thrive. To see the light, you must look up.
“When you are knocked down, be sure to land on your back, because if you can look up, you can get up.” (Nelson Mandela)

If you are an ostrich and have never faced a setback, you need to learn these facts about solving problems first:

• Face it! Confront the problem and get the picture clear.
• Rake it! Work through your denial, aggression or depression around the problem.
• Make it! Look up, stand up and take action.

This is important because just as the sun hardens mud and softens wax, trials can either break us or make us.

Finally, here is my resolve and my truth:-

• To be positive
• To stop whingeing
• To stop blaming
• To ignore the doomsday jokes sent out by people who want you to feel as bad as they do.
• To read the Good News website regularly
• To join the “stop crime, say hello” campaign
• To find goodness in people
• To commit, regularly, to this beautiful country of ours
• To believe in God’s plan for us

I know this – that if I do not work to create the life I want, I will have to endure the life I get.

One final thought:

Matthew Lester writes a column in the Sunday Times Business Times Money. He is Professor of Tax Education at Rhodes University and an advisor to Trevor Manuel. Yesterday he had this to say: “South Africa is my life, it always has been and it always will be.”
Amen to that.

A Prayer for the Country (taken off the www.sagoodnews.co.za website)

Our Father in Heaven
You know exactly how much we need You right now
Please let the Leaders of our country act under your influence
We ask that You will hold your hand over us and our country
And bring relief from the crime and other difficulties we are experiencing.
We are proud and privileged to live in this beautiful country
Look after us and bring us peace and prosperity.
Credits:

Stuart Pennington: “South Africa: The Good News”
Matthew Lester: talk at Sandton Convention Centre, 21 February 2008
Dr Lanette Hattingh and Heinrich Claasen: “African Wisdom: 21 Inspirational Lessons for excellent living.”

By Dave Knowles, Headmaster of St Stithians in Johannesburg

Electricity Crisis

I am sure we are all astonished to hear what is happening with the power debacle. I can no longer remain silent. Just as you think you have heard the worst, then our illustrious Alec Erwin goes and opens his mouth again.

Let's examine the power saga. Our erudite Eskom executives have been paying themselves handsome bonuses. Why? Because they're doing a good job! Why? Because they're running a company that's performing well. Why? Because each year they have been showing a handsome profit? Why? Because they have had minimal recapitalisation expenses - makes great bottom lines.

I am sure that there are many companies out there that could also show such profits by not recapitalising, except that they know the meaning of financial suicide.

For the past 14 years the government has been pocketing this profit with glee. Now they want us to foot Eskom's recapitialisation bill. A 100% price increase in a year? No, Mr Erwin, what do you take us for? The government must return all that money, with interest, and put it where it belongs - in new power generating facilities.


With these ridiculous price hikes they are effectively asking us to pay for the electricity we are not allowed to use, and more. And in the meantime the blackouts are killing businesses both small and big. And subduing further development. Bye bye jobs.

I call on all opposition parties if they are capable and indeed all South Africans if they are interested to make themselves heard. Those responsible for this debacle must bear the consequences - return the money. It's going to be tough enough, as it is, until the new generating facilities come online. Let us not allow them to kill our economy in the process