Eskom demands more diesel cash

ESSENTIAL: POWERS GAS TURBINES TO KEEP LIGHTS ON Acting CEO grilled by energy regulator as utility bids for 25% increase.

Acting Eskom CEO Brian Molefe told a public hearing held by the National Energy Regulator of SA (Nersa) yesterday National Treasury indicated it may decide against the environmental levy that would have been added to the electricity tariff.

This would shave off 2.51% from the 25% tariff increase Eskom has applied for.

Eskom was grilled by Nersa on many aspects of its application which, if granted, would result in a 25% tariff increase in the current year.

Nersa has received 243 submissions from the public about the application.

Nersa earlier indicated it may decide on the matter on Friday, although a circular by National Treasury indicated any increase granted would only be implemented at municipal level in the next financial year, starting on July 1, 2016.

Molefe was the first to present and started by minimising the proposed tariff increase. He said the initial tariff increase Nersa granted for the current tariff period was not the 8% widely quoted, but 6.8%. The remaining 1.2% (to make up 8%) was for its diesel bill, for buying power from independent producers and the environmental levy.

He said the earlier additional increase of 4.69% was a claw-back of actual cost in previous years.

Eskom is asking for an additional 8.58% to cover the anticipated R32.5 billion cost for diesel and R17.5 billion for its Short-Term Power Purchase Programme, Molefe said.

The remaining 2.51% in the application was for the increased environmental levy that may or may not be implemented by Treasury.

Molefe said if the increase was not granted, the country would be faced with drastically increased load shedding at great cost to the economy. Every R1 billion spent on open cycle gas turbines – Eskom’s diesel-gobbling power plants used to reduce load shedding – saved the country R6 billion in the cost of load shedding.

Eskom disputed a statement by Nersa panel members that 50% of its generation units were not working when they returned to service after maintenance.

Nersa member for electricity regulation Thembani Bukula told Molefe and Eskom executive Thava Govender that this information came from an Eskom report by Govender himself. When Govender protested, Bukula offered to show him the graphs Nersa was referring to. – Moneyweb