The Organisation Undoing Tax Abuse (Outa) has requested the Competition Commission to investigate the possibility of fining State-owned power utility Eskom and called for the unbundling of the utility into two entities to break its monopolistic control.
The civil society group this week lodged a complaint with the commission and called for the separation of control over electricity generation and transmission and their unbundling into two distinct corporations.
“Outa believes that a separation of control . . . will break Eskom’s stranglehold over the grid, thereby ensuring that open competition for energy generation at the lowest cost of production will reach the consumer, assuming political meddling is minimised, which, in itself, may be a separate challenge,” the organisation said in a statement.
The group highlighted that an independent grid operator would decide what power South Africa requires, at what prices and in what amounts, with price increases contained once proper competition was introduced.
In addition, the proposed separation will avoid blackouts owing to poor management or corruption within the parastatal and prevent the passing on of the consequences of alleged corrupt activities within Eskom to the electricity consumer.
“Municipalities will be at liberty to buy directly from independent power producers or to build their own electricity generation plants [and this freedom] will enable municipalities to buy excess electricity from household solar energy when available,” Outa pointed out.
The organisation believed “greater flexibility” should arise for consumers to enter into agreements with municipalities, while the maintenance and expansion of the grid would be rationalised and driven by economic reasons.
“[Further,] South Africa will move further away from the situation where an Eskom insolvency or technical failure will pull down the entire grid,” it said, adding that Eskom and its managers should be fined and held accountable for their “abusive dominance”.
Outa’s call follows the release, last year, of the Public Protector’s 'State of Capture' report and the February publication of the Dentons report into irregularities at Eskom.
It added that Eskom had steadfastly refused to follow Ministerial determinations on the procurement of independent power. “This conduct is presently preventing the investment of R58-billion into energy generation projects to proceed and as a consequence, the curbing of more than 13 000 construction jobs from commencing,” Outa concluded.