Busa joins challenge against Eskom’s request

Business Unity SA (Busa) has joined civil rights group the Organisation Undoing Tax Abuse (Outa) in urging the National Energy Regulator of SA (Nersa) to refuse Eskom’s request to be exempted from providing certain information to support its application for a tariff hike in the coming year.

Businesses and the public are still smarting from the increases in tariffs of about 25% a year that Eskom was allowed five years ago when its financial position became critical.

Nersa normally approves Eskom tariff hikes for a threeyear period called the multiyear price determination (MYPD), but this year, it is allowing Eskom to apply only for a price hike for 2017-18. The MYPD methodology is under revision.

In March, Eskom chief financial officer Anoj Singh wrote to Nersa, asking for Eskom to be exempted from giving certain details in its application. These included a regulatory asset base valuation, industry input for research costs, coal volumes in relation to station, contract type and supplier and certain coalhandling and water costs.

It would also be unable to provide certain financial information such as its latest segmented cash-flow statement and a 10-year forecast of capex by asset class, Singh said.

Nersa asked for public comment on the request by May 26.

“Eskom’s application is an attempt to motivate for price increases without justification — this undermines good governance and accountability,” Busa said.

“Given the critical importance of electricity to power the economy and drive inclusive growth and employment, it is imperative that South Africans can take comfort from the fact that tariff increases are justified and required.”

Busa and Ted Blom, energy director of Outa, said this matter was sufficiently important to justify public hearings. Both organisations said the time allowed for public comment was inadequate.