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South Africa: ESKOM not willing to hand over DSM fund to CEF

A directive from the minister of minerals and energy says the bulk of this money should go to the Central Energy Fund (CEF) where a set of new agencies are charged with moving the economy to a more green footing. But Eskom is refusing to give up the money.
South Africa’s energy efficiency programme, Demand Side Management (DSM), is at present being implemented by Eskom. Electricity users fund the programme through a tariff system. But as Eskom both implements the DSM programme and supplies electricity, there is a clear conflict of interest, as acknowledged by Eskom chief executive Thulani Gcabashe in 2004.

Gcabashe and then-minister of minerals and energy Phumzile Mlambo-Ngcuka agreed two years ago that the DSM funds should be transferred to another entity. A ministerial directive was issued to the CEF, instructing it to set up the National Energy Efficiency Agency. Another was issued to the National Energy Regulator, instructing it to transfer responsibility for DSM to the new agency, including the annual budget allocation for DSM funding. Eskom, which is controlled by the department of public enterprises, received a letter explaining the change in policy.

But Eskom has refused to hand over the funds. CEF head Damane told the parliamentary committee on minerals and energy, during hearings into the CEF’s finances, that Eskom was not complying with the policy. “Eskom gets the levy for Demand Side Management. There is a ministerial directive that they must stop and give it to us. But they don’t. Eskom is big and they don’t listen to anyone … Eskom is bullying all of us.”

Additional information: Read the full story in the Mail&Gardian
News date: 03/11/2006

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