We cannot always associate with labour unions and their demands because it often seems excessive and unreasonable.

In the latest instance, however, we fully support the unions in their wage dispute with the parastatal. The unions demand wage increases more than the current inflation rate as well as housing allowances. Eskom refused and claimed bankruptcy. The electricity provider reminds us of the child who murdered his parents but said in mitigation of sentence that he is now an orphan. Eskom claims the same but with one small difference - the enormous performance bonuses it paid its management and the millions it spent on soccer tickets. The one hand claims poverty, the other hand dishes out.

In the end Eskom gave in and offered workers better wage increases and housing allowances. The unions also demanded guarantees that management will not claim bonuses this year. Now we will see if Eskom really has no money. We also wonder if the parastatal considers any revenge. Three years ago when the energy regulator, Nersa, refused Eskom's application for tariff increases, electricity supplies suddenly dried up. Ironically Zimbabwe had electricity generated by Eskom.

Eskom lightly threatened that load shedding can follow after the World Cup soccer tournament and the following two years. However, there was enough energy during the event. Only the schools were closed but the rest of the country used electricity as usual. Why will there be a shortage? Is this revenge because management cannot claim bonuses or buy themselves tickets to the Three Nations Rugby series?

Wednesday, 7 July 2010: Eskom has issued some municipalities in the Free State Province with notices of its intention to disconnect their electricity supply should they not settle their outstanding accounts before 20 July 2010.

The municipalities in arrears are: Mangaung (Bloemfontein, Botshabelo), Ngwathe (Parys, Heilbron), Moqhaka (Kroonstad, Viljoenskroon), Matjhabeng (Welkom, Odendaalsrus), Masilonyana (Brandfort, Winburg), Mafube (Frankfort, Villiers), Nala (Bothaville, Wesselsbron) and Dihlabeng (Bethlehem Fouriesburg).

The municipalities of Kopanong (Bethulie, Phillipolis, Gariep), Mohokare (Zastron, Smithfield, Rouxville) and Naledi (De Wetsdorp, Wepener) are also affected as they are supplied by Mangaung municipality.

Unfortunately discussions between Eskom and the municipalities about the overdue payments did not yield the desired outcome. Eskom will continue its efforts to try to secure payment from the municipalities in order to avoid having to cut electricity supply to these areas.

However, should payment for the outstanding electricity accounts not be received by Tuesday 20 July 2010, Eskom will have to terminate electricity supply to these municipalities for non-payment on that date.

The decision to terminate the electricity supply was not taken lightly. The decision was taken as a last resort and can only be avoided by the municipalities paying the overdue amounts owed to Eskom.

Eskom advises electricity consumers in the above-mentioned areas to make alternative arrangements should a settlement not be reached between the electricity provider and the Municipalities.

Statement issued by Eskom, July 7 2010

STRIKES in SA are spreading, with the National Union of Mineworkers yesterday declaring work stoppages at Eskom from next Wednesday.

The industrial action, which the union says was held off last year, could threaten security of electricity supply during the Soccer World Cup.

Eskom yesterday declined to comment on the union’s threats, saying it was not in a position to do so as negotiations were under way. “We may very well comment once these have been concluded,” the utility said.

A power blackout would be disastrous as electricity is the backbone of the South African economy, driving key sectors such as mining and manufacturing.

The risk of an electricity disruption usually boosts the price of commodities. Investors are also likely to fret over the consequences of the strike if the stand- off between Eskom and its employees takes long to resolve.

The threat creates uncertainty about power supply during next month’s soccer tournament although Eskom has said that it would have enough electricity. It has not said how it would counter a strike by a union that represents about 16000 of its more than 35000 employees.

Johannesburg - Sake24, sister publication of Fin24.com, is requesting a court order that will force Eskom to reveal the prices at which electricity is supplied to BHP Billiton's two aluminium smelters in Southern Africa.

The court documents for the application were submitted to the Rand High Court in Johannesburg on Tuesday and will be served on Eskom during the course of this week.

The application follows a comprehensive investigation during the past few months into these two extremely secret contracts that Eskom signed in the early 1990s for supplying electricity to the smelters Hillside in Richards Bay and Mozal outside Maputo.

Conditions have since changed, and the enquiry disclosed that Eskom is suffering enormous losses from supplying electricity to the two smelters.

The two smelters alone consume 5.68% of Eskom's basic power generation capacity and all indications are that they receive power at less than Eskom's cost price.

Hillside, the larger of the two, consumes 1 200MW, which makes it alone the third-largest single electricity consumer in the country after Cape Town and Durban. These two cities consume 1 300MW each.

The country would therefore no longer have an electricity crisis if power were not supplied to the two smelters.

Electricity prices for Hillside and Mozal are determined wholly or partly by the aluminium price on the London Metals Exchange (LME), according to a highly secret formula in terms of a contract signed in the early 1990s. The agreement is valid for several decades.