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JOHANNESBURG - The Organisation Undoing Tax Abuse (Outa) has threatened legal action against the National Energy Regulator of South Africa (Nersa) in a bid to force the regulator to reveal the coal costs in Eskom’s tariff application.

Outa said Nersa had allowed Eskom to hide the important Eskom coal costs, “which include the massively corrupt Gupta coal deals”. The lobby group said Nersa had previously announced that 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. But now it has emerged that Nersa subsequently decided to allow Eskom to keep certain coal costs secret,” Outa said.

Eskom has applied for a 19.9percent tariff increase for the 2018/19 financial year. Crucial figures relating to coal burn costs were blacked-out in the application released for public comment.

Outa’s energy director Ted Blom said yesterday: “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 rand.”

Blom said the hidden information was crucial for a transparent and fair pricing decision. He said the regulator had justified the exclusion of the information.


He said Nersa told him that, based on the reasons submitted by Eskom for confidential treatment of identified parts of the revenue application “in terms of the Promotion of Access to Information Act, 2000, (Nersa) decided that the information is confidential because its disclosure is likely to cause harm to the commercial or financial interests of Eskom”.

Outa said Nersa had failed to publish the decision of September 4, “and the agenda for Nersa’s executive meeting of September 4 does 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,” said Blom.

The blacked out information included assumed coal burn costs per power station as well as coal burn volume per power station.

“Nersa requires burn to be submitted per station, per contract type and per supplier. Eskom calculates coal burn on a weighted-average-cost basis. A single coal stockpile is maintained for all coal delivered to the stock yard, irrespective of the contract type,” Eskom said. The utility said that the coal burn did not differentiate between contract types such as cost-plus and fixed-price.

Nersa also blacked out information relating to the volume of coal on stockpiles per power station. The withheld information referred to the tons of coal on stockpiles during the 2017 financial year and the first quarter of 2018 financial year.

Eskom said the information was from a coal stock survey conducted in February and May this year. Meanwhile, the SA Municipal Workers’ Union (Samwu) has urged Nersa to reject Eskom tariff application, saying the 19.9percent increase was not affordable.

“We are concerned that the majority of our members, who are by the way the least paid government employees, are going to be gravely affected should this absurd request be granted” said Samwu general secretary Simon Mathe.