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Eskom reacts to concerns raised at Nersa hearings

Apr 17 2018 15:56
Carin Smith

Cape Town - Eskom is dealing decisively with executives and employees who were accused of engaging in fraud and corruption, the state-owned power utility said on Tuesday.

It responded in a statement to various concerns raised during the Western Cape leg of public hearings by the National Energy Regulator of South Africa (Nersa) in Cape Town. Eskom is applying for claw-back tariffs amounting to R66.6bn.

According to Hasha Tlhotlhalemaje, Eskom's general manager for regulation, it is encouraging that many stakeholders share its concern about Eskom’s sustainability.

"We have also noted concerns around irregularities, mismanagement and corruption at Eskom... We are also supportive of the various investigations, which are currently underway and will participate to contribute towards their objectives being met," said Tlhotlhalemaje. "The aim is the recovery of prudent and efficient costs already incurred."

Tlhotlhalemaje gave the assurance that Eskom adhered to the multi-year price determination (MYPD) methodology in making regulatory clearing account (RCA) applications for the 2nd, 3rd and 4th years of the MYPD 3 period.

"Eskom did not submit a revenue application that would result in a tariff increase in this financial year but rather RCA applications, which are backward looking and based on audited actuals of what Eskom has already spent in the provision on electricity," said Tlhotlhalemaje.

Addressing concerns expressed to Nersa at the public hearings by some stakeholders about the magnitude of the RCA claim, Tlhotlhalemaje explained that the reason for the three RCA applications being addressed in one year (2018) was due to court actions brought against Nersa and Eskom by stakeholders from March 2015 to August 2017, relating to the RCA decision for year 1 (2013/14).

"We are requesting Nersa to make a decision on our application for the three years totalling R66bn and also the phasing of the implementation of the allowable amount that will balance the sustainability of Eskom with the impact on consumers,” said Tlhotlhalemaje.   

Policy issues raised during the Nersa hearings could not be addressed by Eskom, Tlhotlhalemaje pointed out. As for concerns raised about Eskom's current state and structure, Tlhotlhalemaje explained that, while these issues are important as they impact stakeholders, the circumstances in the years of the RCA application would have been "very different".

At the end of the hearings in Cape Town on Tuesday, an Eskom representative told the Nersa panel and the stakeholders present that the power utility now has a new board and feedback is that this new board is seen as a credible one, able to deal with governance issues from corruption and irregularities to fraud.

Eskom has also lodged an application in the High Court to try and reverse a previous administrative decision and get about R1.4bn involved returned.

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eskom  |  sa economy  |  corruption  |  tariff hikes  |  governance
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