NERSA: WHAT WENT WRONG

CityPress - - Business - Maake – Moyagabo

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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