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Regulator to hear why Eskom secrets should be revealed

Jul 05 2017 08:01

Cape Town – National energy regulator Nersa will conduct public hearings on Friday regarding on Eskom’s secrecy application, after action group Outa convinced the regulator to do so.

“Nersa is holding a public hearing on Eskom’s secrecy application on Friday and we urge members to attend to help hold Eskom to account,” said Outa energy director Ted Blom in a statement on Tuesday.

In its application to Nersa, Blom said Eskom previously “blindsided” the energy regulator by saying it was operating efficiently and warranted tariff increases.

Blom pointed to allegations of corruption and irregular coal contracts, which will soon be investigated by a Special Investigating Unit inquiry.

“This was patently a massive lie perpetuated from 2007 onwards to date, and resulting in an additional trillion rand in Eskom revenue over this period, which has gone to waste or been stolen,” he said in his application to Nersa dated May 12.

The application comes after Eskom implemented Nersa’s decision of an average 2.2% tariff increase for the 2017/18 financial year in June. The increase was effective for Eskom customers from 1 April 2017, while municipal customers saw the average 0.3% increase start this month.

Now, Outa wants Nersa to implement a 50% reduction in tariffs as a result of Eskom allegedly blindsiding Nersa.

Previously, Eskom asked Nersa for permission to keep secret critical statistics, which should have been included in its upcoming Multi-Year Price Determination (MYPD) electricity price application, which will set electricity prices for 2018.

However, Outa has asked Nersa for Eskom’s application for exemption should be rejected.

“Outa will once again deliver its objection to Eskom’s application for exemption from revealing operating statistics, which we suspect will serve to hide actual amounts of ‘Gupta coal’ consumed by Eskom, thus promoting the consumption of coal that costs Eskom double the amount that it pays other suppliers,” said Blom.

Eskom's board in June approved a draft revenue application for Nersa’s approval, after a leaked document showed it wants clients to pay 19.9% more from April 1 2018.

“The previous multi-year decision made by Nersa for the period 1 April 2013 to 31 March 2018 comes to an end on 31 March 2018,” Eskom chief financial officer Anoj Singh said in a statement on Monday.

“Therefore, there is a need for Eskom to make the next application. Nersa has approved that Eskom can make a revenue application for a single financial year – the 2018/19 year.”

Business Unity South Africa (BUSA) opposed Eskom’s application to raise electricity tariffs without justification, saying it is not in line with good governance and accountability.

The organisation wants such requests in future to be subject to public hearings. “BUSA will not support the condonation of non-compliance with critical processes,” said the organisation.

Nersa has a duty to balance the interests of all stakeholders, BUSA highlighted. This means price increases should be “considered and prescribed” with “full disclosure” of relevant information by Eskom.

nersa  |  outa  |  eskom  |  tariff hikes
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