FILE PHOTO: Ian Landsberg/African News Agency (ANA)
FILE PHOTO: Ian Landsberg/African News Agency (ANA)

Nersa to hold public hearings on Eskom tariff hikes

By Loyiso Sidimba Time of article published Jan 25, 2020

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Johannesburg - Eskom will come under the spotlight next month as the National Energy Regulator of SA (Nersa) holds public hearings on the troubled power utility’s bid to squeeze over R27.2 billion from consumers.

Nersa’s nationwide hearings into Eskom’s 2018/19 regulatory clearing account application are scheduled to begin in Cape Town on February 3 and end in Midrand three weeks later.

In its application, the struggling state-owned entity is seeking the account’s balance of R27.24bn, which includes R5.45bn for revenue under- recovery, R16.8bn for primary energy costs, R4.8bn related to other costs and R166 million for service quality incentives.

According to Eskom, the primary energy variances are related mainly to coal cost variances of over R12.4bn, open cycle gas turbine fuel of more than R3.4bn and other primary energy variances of R1.725bn.

Other cost variances revealed in the application are related mainly to depreciation of over R1.5bn and operating cost variances of about R3.32bn.

Should Nersa approve Eskom’s application, the utility proposes that the balance for the 2019 financial year, which it is applying to recover, be recouped in the 2021 and 2022 financial years.

Eskom has also revealed that load shedding in 2019 amounted to 418.5 hours, over 17 days, which led to loss of revenue of R762m.

At this week’s ANC national executive committee lekgotla, President Cyril Ramaphosa promised that the governing party would continue to be guided by the vision outlined in its Ready to Govern policy document, which states that the balance of the evidence will guide the structuring and restructuring of state-owned companies and decisions on when to increase or reduce public ownership.

Delivering the ANC’s annual January 8 statement earlier this month, Ramaphosa admitted that several key state-owned enterprises were facing great difficulties and that this had a severe impact on broader economic growth and transformation.

“The crisis at Eskom has contributed to load shedding over the last year, further subduing economic activity. Eskom’s new leadership team will need to address the entity’s financial, operational, structural and human resource challenges,” he said.

Ramaphosa pleaded with his party to undertake a thorough and sober assessment of the state of government-owned enterprises and take clear decisions about what must be done to place them back on a sustainable path.

ANC secretary-general Ace Magashule this week said appropriate forms of partnership with private companies, investors and workers would be considered where it would enable public enterprises to fulfil their roles.

The plan to restructure struggling state-owned enterprises would be opposed by trade unions should it involve job losses and privatisation.

The DA demanded that the ANC do more to fix Eskom, including dealing with the allegedly bloated labour force, clarifying the future role of coal and exploring a diversified mix of energy.

Political Bureau

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