DA proposes policy to end Eskom monopoly

DA proposes policy to end Eskom monopoly.
DA proposes policy to end Eskom monopoly.

The Democratic Alliance is planning to introduce what it calls a “cheaper energy bill” – a proposal it said would break the monopoly of state-owned energy supplier Eskom and make provision for municipalities to be able to purchase energy from other suppliers.

Announcing the introduction of the Independent System and Market Operator Bill (Ismo Bill) as a Private Member’s Bill on Monday‚ DA leader Mmusi Maimane said two key points of the proposed law would be allowing metros or municipalities that are financially sound to choose their supply of electricity and not be dependent on Eskom.

“If Eskom’s energy is expensive‚ we go somewhere else. Technology is advancing at such a rate that sustainable energy will allow for the diversification of energy. There should be no reason we are hamstrung by the monopoly that Eskom is‚” said Maimane.

The DA also wants a governance model that includes board representatives from both the public and private sectors. This would ensure that considerations for the consumer were not only what the state wanted‚ he said.

“We need a mixed board that would ensure that private sector interests have a much bigger role to play‚ otherwise you will end up with a Dudu Myeni‚” said Maimane‚ referring to the controversial former SAA board chair.

The DA’s announcement comes just a week after Eskom approached the National Energy Regulator of South Africa (Nersa) for a 15% tariff increase per year for a three-year period‚ on top of the 4.41% price increase that was granted to Eskom by Nersa for 2019/20.

Maimane noted that the most systemic cause of the energy prices increase was the complete lack of competition in the energy sector‚ where the government has a monopoly “which breeds inefficiency‚ rampant corruption and maladministration”.

“Moreover‚ it is not just South African families who are affected by this. Affordable‚ uninterrupted and reliable electricity access is a bare essential requirement for businesses to operate‚ especially SMMEs‚ which are the creators of much-needed jobs for the almost 10 million unemployed South Africans‚” he said.

He added that the recently tabled medium-term budget policy statement had clearly indicated that the fiscus could no longer look after Eskom.

The Ismo Bill was first introduced by then energy minister Dipuo Peters in March 2012 as a first step towards restructuring the electricity industry in SA. The bill was withdrawn in 2014 after it was rejected by the ANC’s national executive committee.

Maimane told parliamentary journalists on Monday that the big difference between the two bills was that the issue of financially viable municipalities having the opportunity to directly purchase from independent power producers was not addressed.

“That’s key because if you don’t get that right‚ setting up an Ismo Bill like the ANC is just duplicating Eskom. Our model is a mixed model‚ it allows for IPPs‚ it allows for the state to be a player and for municipalities to come and purchase.”

He said they were of the view that Eskom should be split into two companies – a company that focuses on power production and a distribution business that would allow cities to purchase directly from the distribution business or from Independent Power Producers (IPPs).

“If we just simply depend on the infrastructure on coal and the mix energy system‚ we don’t adapt to new technologies. Our call is we want sustainable green energy for the future of our country.”

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