NERSA turns down ESKOM Application to reopen Tariffs

It feels so good to see that certain government departments are still working based on merit and not based on greed and necessity. Yesterday consumers were granted a breather after the National Energy Regulator (NERSA) declined Eskom’s application for a tariff reopener – which would have resulted in a total tariff of more than 25% for this year.

NERSA chairperson Jacob Modise said that the regulator, which considered more than 30 presentations on the tariff reopener, decided against the additional 12.61% hike the power utility had requested to cover ZAR 52.8bn in costs for the use of its open cycle gas turbines and buying power from independent power producers.

Modise criticised the “excessive” increases Eskom had received since 2008.

The regulator was also unable to assess the efficiency of the open cycle gas turbines used during peak periods from the information provided by Eskom. This had also counted against the utility.

An application to cover costs of the environmental levy formed part of the overall application. It was not considered because Eskom withdrew this part of the application following the state’s failure to publish it in the Government Gazette. This brought to an end a week of speculation about how Eskom planned to implement any increase granted after the Treasury barred municipalities from charging consumers the extra tariff until July next year, a development which caught acting chief executive Brian Molefe unaware at NERSA’s public hearings last week.

Treasury spokesperson Phumza Macanda said municipal finance laws required changes in tariffs for services such as water and electricity to be tabled in Parliament by March 15, to come into effect from July 1. “The minister of finance granted an extension … to allow the minister of public enterprises to table the adjustments by May 15 – which has now been done,” she said. “Another extension could not be provided because municipalities are also required to comply with legislative requirements, which include approving their budgets by the end of May for implementation from July 1.”

Municipalities were also not allowed to change tariffs during the financial year, but Macanda indicated that these rules would not apply to Eskom’s non-municipal consumers.

This would have resulted in a difference in tariffs charged to Eskom’s direct customers and municipal consumers, a situation NERSA member Thembani Bukula stated afterwards was not a desirable one. Eskom, which was hopeful of implementing the tariff in time for municipalities’ new financial year next month, did not comment on its plans to cover the shortfall.

Spokesperson Khulu Phasiwe said it was too early to comment on the NERSA determination, but we all know that even Eskom is running out of arguments, why consumers should foot the bills for their incompetence and mismanagement.

Well done NERSA; Shame on you, Eskom, … SHAME ….. ON …. YOU !!!

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