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Eskom Green, Eskom’s new operating division, must tread carefully to prevent breaches of competition and privacy laws, warned Ahmore Burger-Smidt, head of regulation at law firm Werksmans.
She was responding to Eskom Green CEO Rivoningo Mnisi’s statements during the recent prestigious event where Eskom Green was officially launched.
According to Mnisi, Eskom Green will get information about customers from Eskom’s distribution department, especially large power users such as mines and intensive power users, and then put together customized solutions for them.
Burger-Smidt says it causes hazard lights to flash.
Firstly, about the “further processing” of the customers’ information and possible use of it for direct marketing, and secondly because Eskom’s dominant position in the distribution of electricity can be used to beat competitors of Eskom Green to ashes.
She says that the information that Eskom’s distribution department has about, among other things, each customer’s consumption pattern, is an extremely valuable set of data.
“This is a pot of gold that they want to use,” she says and warns that they can close the market to competitors.
“We all know that data is very valuable today and can be used in other areas,” says Burger-Smidt. However, the question is whether they may use the information provided for one purpose for something else.
“They will have to think very carefully about how they go about their business. Eskom’s distribution department is dominant in the market,” she says. This can, in addition to dominance at national level, also involve dominance in a specific geographical area, for example where there are many mines.
Tommy Garner, board member of the South African Association of Independent Power Suppliers (SAIPPA), says the information about a customer’s power needs and consumption patterns belongs to that customer. If an independent power supplier needs this information, he must first get the customer’s consent. With this in hand, he then goes to Eskom’s distribution department, which currently readily supplies it to him.
According to Burger-Smidt, if Eskom Green follows the same procedure, there should not be a problem. However, it would not be correct if Eskom Green took a shortcut and requested the information directly from the distribution department and used it for marketing.
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Burger-Smidt’s warning comes against the backdrop of concerns that Eskom Green will also gain preferential access to Eskom’s transmission network.
Network access is currently the major bottleneck in the development of new green power projects. In the Northern, Eastern and Western Cape, where the solar and wind resources are the best, the network is already saturated and further projects must now be placed in other provinces, where it can be up to 10% weaker.
This could affect production and make it more difficult to meet the sums without raising rates too much.
Disputes about network access have already ended up in court when Eskom earlier took away the access point it had allocated to the independent power supplier Mulilo and allocated it to a competitor. The court declared this decision invalid.
The allocation of network connections is also handled by Eskom’s distribution department and Garner previously revealed that the power giant rolls unnecessary stones in developers’ way when they apply for network connections. They also ask for unnecessary information, which developers fear will be used to Eskom’s own advantage.
SAIPPA asked that this function be moved to the National Transmission Company South Africa (NTCSA), an Escom subsidiary that owns and manages the transmission network.
It is currently government policy that the NTCSA be unbundled from Eskom and operate completely independently and impartially.
Eskom had earlier tried to come up with a plan to keep the transmission assets.
Pres. However, Cyril Ramaphosa rejected this plan and appointed a task force for the restructuring of Eskom. It is aimed at a fully independent transmission system operator (TSO) that owns and controls the transmission assets and will also be the market operator when the wholesale electricity market is put into operation.
Emeritus Prof. Anton Eberhard, from the Powers Futures Lab of the University of Cape Town’s Business School, says that when this happens, NTCSA will cease to exist within Eskom.
The presidency said this week that the task force will deliver its first report by the end of this month, with a framework for the establishment of the TSO.
Ramaphosa said: “I am encouraged by the speed and diligence with which the task force has undertaken this important assignment. The establishment of a fully independent transmission company is a critical reform that will support the establishment of a competitive electricity market and ensure reliable, affordable and sustainable electricity supply to drive the economy.”
Despite these steps, it seems that Eskom still has other plans.
During the Eskom Green function, Dr. Mteto Nyati, the power giant’s chairman, in response to a question from Maroela Media about the end state of Eskom said the group will have four operating units: Eskom Generation, NTCSA, Distribution and Eskom Green.