Regulator cracks the whip over Eskom requirements

The National Energy Regulator of South Africa (Nersa) yesterday shut the door on power utility Eskom’s request to not provide certain information needed for its application for more money from taxpayers.

“On March 27, 2017, Nersa received an application from Eskom, requesting condonation of Eskom’s request to deviate from meeting certain requirements of the multi-year price determination (MYPD) methodology and minimum information requirements for tariff application for its one-year (2018-19) revenue application,” Nersa spokesperson Charles Hlebela said.

Eskom said in its application it was unable to separate coal volumes and coal handling from its various suppliers, and because its water costs were relatively low, didn’t have the details.

“They need to provide all the information required by Nersa in order to regulate Eskom’s tariffs,” Hlebela said, adding Eskom already had much of the information at hand from previous MYPDs.

Energy expert Chris Yelland said Nersa was being more demanding on the information, which was required from Eskom in its price applications.

“It seems Nersa is insisting on full transparency so it can look at the costs of individual power stations and also look at them in respect of different sources of coal,” Yelland said.

Nersa determined Eskom must use a purchase ratio for the coal burn rate to determine volume, and provide coal handling costs per station “based on the activities assumed to be relevant”.

Yelland said coal was of widely varying quality, which made it important for Nersa to understand the performance of power stations in relation to the quality of coal – and price – being received.

Eskom has been in turmoil recently with allegations of dealing with the politically connected Gupta family. It allegedly provided Absa with a R1.6 billion guarantee in favour of the Guptas and Duduzane Zuma, President Jacob Zuma’s son, who owned Tegeta so it could buy a coal mine.

Recently, amaBhungane Centre for Investigative Journalism claimed R495 million consulting fees were allegedly paid to Trillion Capital Partners. The utility also suspended chief financial officer Anoj Singh.

The list of what Nersa should be investigating is growing longer, Yelland said.

“At least some sort of due process is being brought to bear,” he said. “The activities of Eskom are of deep interest to the public because its product, electricity, affects all of us – as does the cost of electricity.”

Eskom has until September 7 to comply with Nersa’s ruling.