Nersa denies Eskom its claw-back estimates

ESKOM’S hopes for a huge financial injection were dealt a blow after the National Energy Regulator of South Africa (Nersa) said the power utility could recover only R32.69 billion through the Regulatory Clearing Account (RCA).

The amount is less than half the R66.6bn that Eskom wanted to claw back from consumers for the 2014/15, 2015/16 and 2016/17 financial years.

In its decision – which came after an extensive public consultation process – Nersa said Eskom could claw back R12.6bn for 2014/15, R12bn for 2015/16 and R8bn for 2016/17.

Yesterday Nersa chairperson Jacob Modise highlighted the governance problems at Eskom.

He said that at the time it made the RCA decision, the extent of the governance failures at Eskom was unknown.

Modise said Nersa might launch its own investigation into the governance failures.

“Our challenge has been and still remains regulating the energy industry in a manner that balances the interests of energy producers on the one hand and those of consumers on the other.

“This is never an easy task, for inevitably it is influenced by the greater economic environment, both locally and internationally, and as directed by the policy environment of the government,” said Modise.

The RCA is a backward-looking mechanism that seeks to reconcile what Nersa awarded Eskom on the basis of what was forecast in the Multi-Year Price Determination (MYPD) and what materialised, as reflected in the utility’s financial statements.

In its application, Eskom said it wanted to recover R19.2bn in the 2014/15 financial year, R23.6bn in 2015/16 and R23.8bn in 2016/17. In 2014/15, Eskom wanted to recover R10.5bn for primary energy, R8bn in 2015/16 and R2.6bn in 2016/17.

Eskom said yesterday that it had noted the decision and would give a detailed comment once it had received the reasons for the decision.

“We made the application guided by the principles embedded in the MYPD methodology in making RCA applications. We adhered to these principles and in addition, we applied the principles of the Nersa RCA decision on our RCA application for the first year of the MYPD 3 period in 2016,” said Eskom acting chief financial officer Calib Cassim.

The Energy Intensive User Group of Southern Africa said yesterday that it would comment later on the R32.69bn RCA balance.