Cape Town - Power giant Eskom received a tongue-lashing on the first day of public hearings hosted by the National Energy Regulator of South Africa (Nersa).
Eskom’s general manager Hasha Tlhotlhalemaje gave an overview presentation on the power utilities financial standing. Tlhotlhalemaje said Eskom has not yet recovered revenues, and that Eskom has a funding shortfall of R10 billion.
“NERSA’s decision on primary energy was approximately R10 billion lower than the application. This would require Eskom to decrease coal costs by 17%. The 2019 financial year determination left Eskom with a funding shortfall.
"This shortfall needed management intervention and a re-prioritisation of cost between the different licensees and cost categories,” Tlhotlhalemaje said.
%%%twitter https://twitter.com/hashtag/Nersahearings?src=hash&ref_src=twsrc%5Etfw">#NersahearingsEskom says that it’s revenue from sales is R10 billion lower. @TheCapeArgus @IOL pic.twitter.com/3GJIuirtnd
— Marvin Charles (@MarvinCharles17)
She said the energy regulator, in its decision, assumed a higher sales volume compared to what actually materialized.
“Variances in sales volume are due to lower international sales as well as poor economic conditions for local sales,” she said.
Eskom contends that approving increases by 9.41% for 2019-2020, 8.10% for 2020-2021 and 5.22% for 2021-2022 instead of the requested 16% was insufficient.
Eskom is facing financial challenges, with a staggering debt of more than R400 billion.
WATCH: Tlhotlhalemaje speaks at the #Nersahearings on the power utilities revenue variances. @TheCapeArgus @IOL pic.twitter.com/kdqJLBNmoD
— Marvin Charles (@MarvinCharles17) February 3, 2020
Chairperson of the Nersa panel, Nomfundo Masti, said that Eskom's presentation does not provide any clarity to taxpayers and a guarantee whether the money they will be paying will be in good use.
“You (Eskom) couldn’t do all the maintenance as you had planned so what was done with the money? We need to know how the budget was utilized [in October] and also what were the circumstances that lead to load shedding,” she said.
“We are unable to benefit from the presentation from Eskom [and are seeking] clarity from you. This presentation is not helpful. We cannot accept this.
"[This] needs further investigation. We expect Eskom to answer the questions,” she said.
The hearings will be held in all nine provinces and run until February 24. The hearings in Cape Town continue on Tuesday.
Eskom’s general manager Hasha Tlhotlhalemaje gave an overview presentation on the power utilities financial standing Video: Phando Jikelo/African News Agency
@MarvinCharles17