Agri Limpopo opposed Eskom’s Regulatory Clearing Account (RCA) application for the 2018/19 financial year at the National Energy Regulator of South Africa (Nersa) public hearing that took place at Bolivia Estate last Wednesday.
Rodger Ferguson presented Agri Limpopo’s case before the Nersa panel and said that it is inherently unfair for Eskom’s consumers to carry the burden of bad, malfeasant and corrupted governance, state capture and rampant looting committed with absolute impunity, poor policy choices and intransigence by government in the face of a crisis given factional politicking, much with nefarious alternative intent.
Ferguson argued that the agricultural sector can no longer sustain continual above-inflation electricity tariff increases and requested that the application be dismissed.
According to Agri Limpopo’s presentation, the proposed increase will negatively affect the agricultural sector which is already under pressure. “Eskom’s business model is broken and no longer sustainable. It is now in a death spiral and acceding to this application could very well exacerbate its plight,” Ferguson said.
According to Agri Limpopo, the real solution lies in the radical reformation and restructuring of the electricity sector and sources of energy generation and storage and a return to good, ethical, clean, corrupt-free and progressive governance.
In conclusion, Agri Limpopo recommend that the Regulatory Clearing Account system be scrapped.
The RCA is a correction mechanism of the Fourth Multi-Year Price Determination (MYPD), where excess or inadequate returns are managed. It consists of the variance between the actuals for the full financial year and what was allowed in the MYPD decision of the Energy Regulator. By design, the RCA is backward-looking and deals with actuals and facts. The public hearings are conducted in all nine provinces and Nersa’s decision is expected to be announced on 24 March.
Story/photo: BARRY VILJOEN
>>barryv.observer@gmail.com
