LIVE: Eskom lifestyle audits to start next week

Hadebe said planned lifestyle audits for officials will start next week, the audits were delayed because of a legal process.

Eskom will appoint a private company to do the audits today.

The Eskom Acting CEO said plans are in place to improve stockpile levels at the power stations that are currently below minimum stock levels.

Eskom earlier reported that seven power stations are running on coal stock piles.

Apart from taking surplus coal from other power stations, Eskom will also talk to suppliers to give additional coal from that which has been ordered.

"We would be fooling ourselves if we think that there are no problems at Eskom, we are going to continue improving revenue collection.... but we are on the right trajectory" said Hadebe.

Hadebe said while the risk of load shedding always exists it is not likely to occur this winter, as Eskom has implemented plans to manage a shift in plant performance and coal stock levels.

"Plans are in place to improve stockpile levels at the power stations that are currently below minimum stock levels," he assured South Africans at the quarterly update of the state of the grid system.

Hadebe told the briefing at Megawatt Park that Eskom has 10 000 MW available for planned and unplanned load shedding.

He explained part of the strain on the coal supply is linked to problems at Tegeta which is in business rescue.

Tegeta's Optimum Coal Mine supplies coal to Eskom's stations. 

The previous board and management tried to deal with it by approaching National Treasury to intervene with procurement processes.

At the time Treasury was concerned about corporate governance issues at Eskom. 

"The process of coal procurement is different to going to a shop and buying bread. It is not as simple as going to shop to buy bread," said Hadebe. 

But he assured Eskom was doing a number of things on the matter. Additionally capital constraints have added to the strain on coal supply, he explained. 

Hadebe says Eskom has 35 days of coal stockpile and that the company is sourcing additional coal from supplies to ensure that there are outages in winter.

Last week Eskom said that seven of its stations had less than 20 days of coal supply, now there are only six as Komati is now online.

Eskom is also in discussion with Tegeta's business rescue practitioners to ensure there is coal supply at Hendrina station, to ensure there is "sufficient coal" in winter.

Eskom Acting CEO Phakamani did not waste time on clarifying whether there would be load shedding this year.

In a briefing about the state of the system, Hadebe said: "We think holding all things constant, we are not going to have load shedding."

Eskom meanwhile dodged a Fitch ratings cut on Wednesday, but the ratings agency has kept the utility on negative watch.

Fitch affirmed Eskom's 'BB-' credit rating, despite its liquidity challenges.

The power utility was dealt a blow earlier this year when Fitch Ratings and S&P Global Ratings downgraded its bonds to junk.

Fitch affirmed Eskom's long-term local currency issuer default rating (IDR) and unguaranteed local currency senior unsecured ratings at speculative grade of 'BB-'.

"We are encouraged by Fitch Ratings’ decision to affirm Eskom’s credit ratings," said Eskom acting CEO Phakamani Hadebe.

South Africans will learn if load shedding will be a reality this winter as Eskom Acting CEO Phakamani Hadebe is expected to brief the public on the state of the system from Megawatt Park on Thursday.

The state power utility has been dealing with a coal supply shortage. Last week Eskom issued a statement indicating that seven of its power stations have less than 20 days of stock piles. Overall the coal stockpile levels are at 35 days, excluding Medupe and Kusile power stations.

Eskom has also claimed that its coal supply problems are linked to the fact that Tegeta, which owns Optimum Coal Mine, is in business rescue. Tegeta supplies three stations; Hendrina, Komati and Majuba, Willy Majola, acting group executive of transmission told Parliament’s portfolio committee on public enterprises in April.

Eskom board member Neli Magubane told the Standing Committee on Appropriations last week that the national grid is stable. She also said that Eskom has plans in place to manage primary energy resources and ensure healthy stock piles. The details of this plan are to be revealed at today’s briefing.

Meanwhile independent energy expert Ted Blom told Fin24 on Wednesday that Eskom’s board should have foreseen a risk of coal supply shortages six months ago. He said there is a 50% chance there will be load shedding this winter.

The briefing is set to start at 10:30.