NERSA: WHAT WENT WRONG
The tale surrounding Eskom’s application for an extra tariff increase – when the Treasury deadline for the tabling of municipal bulk tariffs had passed – grew murkier this week.
At the public hearings of the National Energy Regulator of SA (Nersa) last week on Eskom’s request for an additional 12.61% on top of the 12.69% already granted for this year, acting CEO Brian Molefe reportedly denied knowledge of a Treasury circular to municipalities stating that any tariff increases granted after May 15 would have to be implemented during the next municipal financial year – and not from the beginning of this month, as Eskom had hoped.
If Nersa had granted that request, which Eskom reduced to 9.58% during the hearings, the utility would have collected more from its direct customers, with municipal consumers getting respite until July 2016.
News of Eskom’s intention to apply for the increased tariff first emerged on March 16, when it wrote to the SA Local Government Association and Treasury to inform them of its intention to apply for more money.
That was already after Treasury’s first deadline, March 15, for the submission of bulk tariffs had passed.
Makgola Makololo, acting deputy director general of energy at the department of public enterprises, said Minister Lynne Brown then asked Finance Minister Nhlanhla Nene to extend the deadline to May.
But Nersa decided to go through a publicparticipation process, which threw a spanner in the works, as Eskom and the department expected the regulator to make a decision based on the merits of their application.
The participation process was not the norm for a tariff reopener, the department said. But Nersa said it was nothing out of the ordinary.
“Eskom’s application was received on April 30 2015,” said Dheshree Nelson, a Nersa spokesperson. “Nersa always conducts public hearings as part of its due regulatory process to ensure effective public participation in its decision-making process.”
In any case, Nersa’s response to the application was a resounding “request denied”, saying it did not comply with the applicable methodology.
Nersa directed Eskom to reapply within the rules or lodge a new application for the three years to end-March 2019 with projections for the following three years.
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