Nersa will make its determination about Eskom’s regulatory clearing account (RCA) application for the 2018/19 financial year only in March 2020.  Bhekikhaya Mabaso
Nersa will make its determination about Eskom’s regulatory clearing account (RCA) application for the 2018/19 financial year only in March 2020. Bhekikhaya Mabaso

WATCH: Nersa decision for next financial year by March

By Siphelele Dludla Time of article published Dec 9, 2019

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JOHANNESBURG - The National Energy Regulator of South Africa (Nersa) will make its determination about Eskom’s regulatory clearing account (RCA) application for the 2018/19 financial year only in March 2020, following a process for stakeholder comments and public hearings.

Nersa on Friday published the timelines for processing Eskom’s 2018/19 RCA application, which it initially received in August, before it was revised last month. The energy regulator's decision for the 2019 financial year was an average nominal increase of 5.23percent.

Nersa determined the total allowable revenue for the 2019 financial year to be R190billion.

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The RCA is an account in which all potential adjustments to Eskom's allowed revenue that has been approved by the energy regulator is accumulated and is managed.

As a correction mechanism of the multi-rear price determination, the RCA is intended to mitigate and manage the risk of excess or inadequate returns, and it does so by adjusting regulated revenue. The methodology allows Eskom to adjust for the over- or under-recovery of preceding years’ regulated costs and revenues through the electricity tariffs in subsequent years.

Eskom is requesting to recover a total of RCA balance of R27323million.

The power utility said its 2019 RCA submission was driven substantially by certain cost variances and revenue variances due to the sales volume determined by Nersa.

It said the revenue impact of load shedding was not included in the RCA balance, as the key cost variances were in coal, open cycle gas turbine fuel, depreciation, employee benefits and maintenance.

Eskom has already approached the courts to have Nersa’s tariff determination for 2018/19 set aside, and the matter is still pending.

Nersa granted Eskom permission to recover R8.2bn from standard-tariff customers for the 2019/20, 2020/21, 2021/22 and 2022/23 financial years.

This as the energy regulator granted Eskom a 5.23percent increase from April 1, 2018, following Eskom's application for an increase of 19.9percent as part of a one-year revenue application.

Nersa will consider written submissions until January and hold public hearings in all the provinces for three weeks in February before its electricity subcommittee considers draft reasons for its decision in March.  

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