Nersa threat­ened with court ac­tion over Eskom coal costs

The Mercury - - NEWS - Siseko Njobeni

THE OR­GAN­I­SA­TION Un­do­ing Tax Abuse (Outa) has threat­ened le­gal ac­tion against the Na­tional En­ergy Reg­u­la­tor of South Africa (Nersa) in a bid to force the reg­u­la­tor to re­veal the coal costs in Eskom’s tar­iff ap­pli­ca­tion.

Outa said Nersa had al­lowed Eskom to hide the im­por­tant Eskom coal costs, “which in­clude the mas­sively cor­rupt Gupta coal deals”.

The lobby group said Nersa had pre­vi­ously an­nounced that it had de­clined Eskom’s re­quest to omit cer­tain costs from its rev­enue ap­pli­ca­tion, al­low­ing it only to omit information on the reg­u­la­tory as­set base. “That de­ci­sion was rat­i­fied at a Nersa board meet­ing on July 27, 2017, and pub­licly an­nounced. But now it has emerged that Nersa sub­se­quently de­cided to al­low Eskom to keep cer­tain coal costs se­cret,” Outa said.

Eskom has ap­plied for a 19.9per­cent tar­iff in­crease for the 2018/19 fi­nan­cial year. Cru­cial fig­ures re­lat­ing to coal burn costs were blacked-out in the ap­pli­ca­tion re­leased for public com­ment.

Outa’s en­ergy di­rec­tor Ted Blom said yes­ter­day: “This in­di­cates that the state cap­ture move­ment may ex­tend to Nersa as well, as the con­tin­ued se­crecy draws a veil over the cor­rupt Gupta trans­ac­tions, which are be­lieved to be worth bil­lions of rand.”

Blom said the hid­den information was cru­cial for a trans­par­ent and fair pric­ing de­ci­sion. He said the reg­u­la­tor had jus­ti­fied the ex­clu­sion of the information.


He said Nersa told him that, based on the rea­sons sub­mit­ted by Eskom for con­fi­den­tial treat­ment of iden­ti­fied parts of the rev­enue ap­pli­ca­tion “in terms of the Pro­mo­tion of Ac­cess to Information Act, 2000, (Nersa) de­cided that the information is con­fi­den­tial be­cause its dis­clo­sure is likely to cause harm to the com­mer­cial or fi­nan­cial in­ter­ests of Eskom”.

Outa said Nersa had failed to pub­lish the de­ci­sion of Septem­ber 4, “and the agenda for Nersa’s ex­ec­u­tive meet­ing of Septem­ber 4 does not in­clude any ref­er­ence to this mat­ter. This is not trans­par­ent. Given this sad state of af­fairs, we re­serve our right to ap­proach the courts for re­lief if needed,” said Blom.

The blacked out information in­cluded as­sumed coal burn costs per power sta­tion as well as coal burn vol­ume per power sta­tion.

“Nersa re­quires burn to be sub­mit­ted per sta­tion, per con­tract type and per sup­plier. Eskom cal­cu­lates coal burn on a weighted-av­er­age-cost ba­sis. A sin­gle coal stock­pile is main­tained for all coal de­liv­ered to the stock yard, ir­re­spec­tive of the con­tract type,” Eskom said. The util­ity said that the coal burn did not dif­fer­en­ti­ate be­tween con­tract types such as cost-plus and fixed-price.

Nersa also blacked out information re­lat­ing to the vol­ume of coal on stock­piles per power sta­tion. The with­held information re­ferred to the tons of coal on stock­piles dur­ing the 2017 fi­nan­cial year and the first quar­ter of 2018 fi­nan­cial year.

Eskom said the information was from a coal stock sur­vey con­ducted in Fe­bru­ary and May this year.

Mean­while, the SA Mu­nic­i­pal Work­ers’ Union (Samwu) has urged Nersa to re­ject Eskom tar­iff ap­pli­ca­tion, say­ing the 19.9per­cent in­crease was not af­ford­able.

“We are con­cerned that the ma­jor­ity of our mem­bers, who are by the way the least paid gov­ern­ment em­ploy­ees, are go­ing to be gravely af­fected should this ab­surd re­quest be granted” said Samwu gen­eral sec­re­tary Si­mon Mathe.

Nersa’s head of­fice in Pre­to­ria. Fig­ures re­lat­ing to Eskom’s coal costs were blacked out in a Nersa re­port.

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