South Africa 11.8.2017 01:01 pm

Nersa turns down Eskom’s request to deviate from MYPD methodology

Nersa. File photo.

Nersa. File photo.

Eskom said it would adhere to the decision.

The National Energy Regulator of South Africa (Nersa) announced on Friday that it had refused Eskom’s request to deviate from meeting certain requirements of the Multi-Year Price Determination (MYPD) methodology that will set electricity prices for 2018.

Nersa also declined to grant Eskom condonation for the Minimum Information Requirements for Tariff Application (MIRTA), with the exception of the valuation of Regulatory Asset Base (RAB) and Information on deferred debits and credits.

In March, Eskom applied to Nersa requesting condonation of its request for its one-year (2018/19) revenue application.

This comes after Organisation Undoing Tax Abuse (Outa) opposed Eskom’s bid to deviate from the MYPD and convinced Nersa to hold public hearings on the matter, saying the move would allow Eskom to keep “critical operating statistics” as a secret if approved. But Eskom applied for exemption from publishing those statistics.

Eskom is seeking a 19.9 percent tariff hike from April 1, 2018, and has already implemented the decision by Nersa to cap the tariff increase for the 2017/18 financial year at an average 2.2 percent.

The power utility requested exemption from providing the information on disaggregated coal volumes, coal handling and water costs, and research and development (conducting consultation).

Eskom also requested exemption from providing information on segmented cash flow statements, split of sales revenues between regulated and non-regulated industries, projected ten-year sales forecast, disaggregated line items such as coal purchases and burn, environmental levies, and deferred debits and credits.

The condonation regarding the valuation of RAB was granted in respect of Eskom’s one-year (2018/19) revenue application.

But the energy regulator has instructed Eskom to revalue its regulatory asset base in time for its next MYPD application.

The energy regulator gave Eskom 30 calendar days to comply with the MYPD methodology and the MIRTA requirements where condonation has not been granted.

Eskom said it would adhere to the decision.

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