Energy regulator grants Eskom approval to claw back R13.3bn in tarriffs

The National Energy Regulator of South Africa (Nersa) has granted Eskom approval to recover R13.3 billion as part of the power utility’s regulatory clearing account (RCA) application for the 2018/19 year.

The RCA application is a mechanism which allows Eskom to adjust for any over or under recovery of revenue for a particular year due to events which differ from initial assumptions made when the energy regulator granted tariffs. 

The under or over recovery is then accounted for in adjustments made in future tariffs.

Eskom had sought to recover R27.3 billion for the 2018/19 year for adjustments to primary energy costs, the use of open cycle gas turbines as well as employee benefits and sales volumes.

In a statement issued on Friday night, the energy regulator said Eskom could recover an amount of R13.3 billion from tariffs charged to standard customers, special pricing arrangement customers and international customers.

The reasons for the decision would be published in due course, Nersa said.

In reaching its decision, it held public hearings in eight provinces from 3 to 24 February 2020, where interested parties were able to make submissions.

Nersa said it had balanced both Eskom and the public’s interest in reaching the decision.

An implementation plan for the 2018/19 RCA balance is yet to be developed, for approval by Nersa.

It acknowledged certain governance failures had been a factor in Eskom’s under recoveries in the 2018/19 year. But the full extent of these governance failures and amounts associated with them, have not been fully quantified, Nersa noted.

“Upon the completion of any investigations by any organ of state or commission into these governance failures, and if the failure is quantified, the energy regulator may, in future Eskom revenue applications, effect adjustments to Eskom’s revenue, based on the relevant outcome of the investigation,” Nersa said.

Previously, Eskom said it was working with law enforcement agencies to recover money lost due to corruption, adding any future revenue applications would be based on the outcomes of investigations.

Source Article