Power usage down, prices up

cape town - the down-turn in the economy has led to a drop in the amount of electricity sold by producer eskom, which could lead to tariffs going up, mps heard on wednesday.

according to figures tabled at a meeting of parliament's public enterprises portfolio committee, there has been a 7.44% drop in the amount of electricity sold by eskom this year (up to february 8) compared to the same period last year.

in terms of the current financial year, electricity sales are down 3.18% compared to the previous year.

"you can expect that by the end of the financial year, the decline in sales from year to year will have been somewhere around two-and-a-half to three percent," public enterprises deputy director-general chris forlee told members during a briefing on eskom.

the drop in electricity sales meant eskom would under-recover on its costs, he said.

speaking on the effects the drop in demand would have on eskom's costs, public enterprises director-general portia molefe said if volumes went down, tariffs would go up.

"it is definitely a cause for concern," she said.

committee chairperson fatima chohan noted that government had for months been calling on consumers to save electricity.

"it's a double-edged sword," she said.

forlee said talks with mines and heavy industry showed many firms had reduced production, which had caused a big drop in electricity consumption.

"but a lot of them have indicated that as soon as things pick up, they will ramp back up. that could happen very quickly," he said.

eskom plans to spend r385bn over the next five years, most of which will go towards generation, transmission and distribution infrastructure.

forlee said spending on new power stations was essential to push eskom's reserve margin from a current five percent to between 15% and 19%.