Outa reprimands ‘captured’ Nersa for letting Eskom keep coal costs secret

The Organisation Undoing Tax Abuse (Outa) claims it has discovered the National Energy Regulator of South Africa (Nersa) agreed to let Eskom keep some costs secret more than a month after publicly announcing that the information must be made available.

Nersa previously announced it had declined Eskom’s request to omit certain costs from its revenue application, allowing it only to omit information on the regulatory asset base.

That decision was ratified at a Nersa board meeting on July 27, 2017, and publicly announced. At the time, Outa welcomed it.

But now Outa alleges it has emerged Nersa subsequently decided to allow Eskom to keep certain coal costs secret.

Outa’s energy director, Ted Blom, who previously felt vindicated when Nersa’s original decision was announced, now says “that victory is now absolutely hollow”.

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“This indicates that the state capture movement may extend to Nersa as well, as the continued secrecy draws a veil over the corrupt Gupta transactions, which are believed to be worth billions of rands,” Blom said.

The information redacted from Eskom’s application released for comment includes coal burn costs, which Blom regards as crucial information for a transparent and fair pricing decision.

In light of Nersa’s decision of July 27, Blom asked Nersa for the missing information, but said two replies from Nersa indicated that another decision was taken on September 4, allowing Eskom to block out the coal costs.

“The energy regulator, at its meeting of September 4, 2017, based on the application and reasons submitted by Eskom for confidential treatment of identified parts of the Eskom revenue application in terms of the Promotion of Access to Information Act [Paia], decided that the information is confidential because its disclosure is likely to cause harm to the commercial or financial interests of Eskom,” Nersa said in response to Blom’s demand.

Blom also disclosed Nersa failed to publish the September 4 decision and that the agenda for Nersa’s executive meeting of September 4 did not include any reference to this matter.

“This is not transparent. Given this sad state of affairs, we reserve our right to approach the courts for relief if needed,” Blom said.