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Bad experiences will help us make better decisions - Eskom

Feb 04 2016 14:41
Naledi Shange, News24

Johannesburg - Eskom believes that its experiences over the past few years will assist it in making better decisions on how to keep the lights on.

"We have become wiser in our risk management approach. You can only do that with the benefit of hindsight. We have learned, and today we do things differently," said Eskom's group executive in generation, Matshela Koko. 

He was part of an Eskom team which responded to questions from the National Energy Regulator of SA, following a presentation by the parastatal into why it needed more money for the next financial year. 

Koko said Eskom, in the last few years, had to deal with some embarrassment when the country was cast into darkness during load shedding, which he claimed was a result of not performing maintenance in time at its power plants.

The electricity provider had since learnt how to strike a balance between maintaining power plants, while still providing power and utilising less fuel.

Eskom is hoping that Nersa will grant it a R22.8bn adjustment for the 2013/2014 year for Regulatory Clearing Account (RCA). 

The RCA application is an application for cost recovery and revenue adjustments based on actual past variances, not a revenue application based on future estimates, Eskom explained. 

If granted, this could see a national tariff increase of around 16%. 

Explaining the current shortfalls it experiences, the parastatal explained that looking at the GDP of 2010 - upon which it based its forthcoming tariff increase plans - it had not forecast the current GDP and the poor performance of the rand. 

In its presentation, Eskom submitted that the RCA would not be used to recoup lost revenue due to load shedding. 

The revenue shortfall was primarily due to an increase in costs it incurred by utilising its diesel powered turbines. 

The high use of diesel was to ensure fewer incidents of load shedding. 

Eskom submitted that had it not resorted to using diesel, the country could have lost about R25bn in generated income and load shedding would have occurred throughout the year. 

Meanwhile, scores of people gathered outside the Gallagher Estate in Midrand, where the hearings were being held. 

The crowd demonstrated against the proposed tariff hike.

nersa  |  eskom  |  electricity  |  tariff increases

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