Cape Town - The National Energy Regulator of SA (Nersa) announced on Monday that it will oppose Eskom’s High Court application to review its decision on the Regulatory Clearing Account (RCA) and supplementary applications for the 2018/19 financial year.
Nersa said it had resolved at a meeting on April 28 to oppose the application brought by Eskom to review and set aside its decision pertaining to the approval of a RCA balance of R13.271 billion for the 2018/19 financial year, and its decision to grant Eskom’s supplementary revenue balance of R1.288 billion in respect of the 2018/19 financial year.
The RCA is a monitoring and tracking mechanism that compares certain costs and revenues assumed in the multi-year pricing determination (MYPD) decision made by Nersa, to actual costs and revenues incurred by Eskom, as reflected in its audited financial statements.
Should there be a difference between the decision and actual costs and revenues; the difference is subject to RCA rules. These allow for an under or over recovery of these costs. If the RCA balance is in Eskom’s favour, the rates will be adjusted upwards and if it is in customers’ favour, the rates will be adjusted downwards.
Nersa said Eskom’s judicial review application was received on April 12.
“In arriving at the decision to oppose the application, Nersa considered the factual matrix, applicable regulatory and legal principles.
“Nersa further considered the impact of Eskom’s continuous court review applications on the government’s economic recovery plans, as well as hardships on customers. In this regard, interested stakeholders are welcome to join Nersa in opposing the review application if they consider that the court decision may negatively affect them.
“Nersa will be opposing the judicial review application within the required time frame and process,’’ Nersa said.
Eskom yesterday confirmed the review application for the financial year (FY) 2019 RCA and supplementary application for the FY 2019 was made.
“This application has been made in alignment with previous review of RCA decisions for the FYs 2015, 2016, 2017 and 2018. The principles being addressed are similar to those addressed in the previous reviews,” Eskom said.
For civil society organisation STOP COCT, Sandra Dickson noted concern that “it took Nersa half a month to decide to oppose Eskom’s latest onslaught on consumers to raise electricity tariffs and to notify interested parties”.
With Eskom's previous court cases, Nersa put up a poor defence, Dickson said, which resulted in Eskom tripling its annual tariff increase to over 15%.
“Once again consumers are left to Eskom and Nersa’s court battles, which may result in further steep tariff increases for consumers.
“Nersa’s call to interested parties to join Nersa is welcomed. This appears as just another ploy by Eskom to override Nersa and to exploit defenceless consumers with more steep electricity tariff increases for 2022.”