Eskom made an application for the evaluation and approval of the regulatory clearing account (RCA) balance for the first year (2013/14 period) of the third multi-year price determination. Public hearings into this application from Nersa (The National Energy Regulator of South Africa) took place on 18 January in Cape Town.
The media desk, from Eskom stated the RCA is a submission reconciling past variances and is not an application based on future forecasts. Eskom explained that Nersa awards Eskom an “allowed revenue” that is intended to allow Eskom to cover operating costs and earn a reasonable return. This allowed revenue – however, is calculated on the basis of a forecast. According to an eNca article, Eskom is requesting an 16.6 per cent tariff increase. Eskom is claiming an additional R22.8 billion from the 2013/14 year which will amount to an 8.6 per cent tariff increase on top of the 8 per cent agreed increase this year.
The RCA looks at what costs were incurred and compares this to the decision taken by the regulator. “The economy did not grow at the rate that was anticipated at the time of the decision, further impacting Eskom’s operations.” Eskom said therefor they submitted a RCA application to recover R22.8 billon, which is driven substantially by revenue under-recoveries, higher expenditure on coal burn, independent power procedures, open cycle gas turbines and other primary energy costs.
Eskom said that their stakeholders can be assured that they are sensitive to the impact the RCA submission has on the wider economy. “In order to ensure that we remain efficient, Eskom has optimised our capital programme and put in a cost-saving programme that is intended to yield about R60 billion over the five years of the third multi-year price determination period.
“A successful RCA will go a long way in giving confidence in the regulatory system by stakeholders including lenders and rating agencies, which will make it easier for Eskom to raise debt in capital markets to enable us to finish our build programme,” said Eskom.
Cope spokesperson Dennis Bloem said that Cope does not accept that Nersa should allow Eskom an additional increase for its revenue shortfall. “The fact that Eskom experienced a lower than anticipated electricity demand is proof enough that the cost of electricity is already too high,” said Bloem. He further said that electricity users are buckling under economic pressure. “A further hike on the already awarded increase of eight per cent will hurt the economy considerably, it will also stifle growth and cause a further decrease in the demand for electricity,” said Bloem. Cope believes that electricity is becoming unaffordable for most users.
Details: Eskom, 086 003 7566.
