SA Regulator Records Governance Failures But Grants ESKOM R13.3 Billion in Tariff Recoveries

  • The National Energy Regulator of South Africa (Nersa) has granted Eskom approval to recover R13.3 billion of the R27.3 billion for the 2018/19 year for adjustments to primary energy costs, the use of open cycle gas turbines as well as employee benefits and sales volumes.
  • This outcome is part of the power utility’s regulatory clearing account (RCA) application for the 2018/19 year.

NERSA announced that based on the information at its disposal and the analysis of Eskom’s Regulatory Clearing Account (RCA) application for the 2018/19 financial year, it has approved as follows:

  • An RCA balance of R13 271m in Eskom’s favour.
  • The RCA balance will be recoverable from the standard tariff customers, local Special Pricing Arrangement (SPA) customers and international customers.
  • The Reasons for Decision (RfD) will follow once the applicable requirements, including, but not limited to, the confidential treatment of some information, have been finalised.
  • An implementation plan for the 2018/19 RCA balance will be developed for approval by the Energy Regulator within a reasonable period of time.

for Upon the completion of any investigations by any organ of state or commission into these governance failures, and if the failure is quantified, the Energy Regulator may, in future Eskom revenue applications, effect adjustments to Eskom’s revenue, based on the relevant outcome of the investigation.

The RCA application is a mechanism which allows Eskom to adjust for any over or under recovery of revenue for a particular year due to events which differ from initial assumptions made when the energy regulator granted tariffs.

The under or over recovery is then accounted for in adjustments made in future tariffs.

Read the full report from Nersa Here

Author: Bryan Groenendaal

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