Cabinet approves creation of power pricing appeal body
THE National Energy Regulator of SA (Nersa) may no longer have the last word on pricing since an appeal authority is due to be put in place. The Department of Energy’s Ompi Aphane said yesterday the Cabinet had approved the National Energy Regulator Amendment Bill, which would provide for the creation of an appeal mechanism against Nersa’s rulings.
THE National Energy Regulator of SA (Nersa), which among other things determines electricity tariffs, may no longer have the last word on pricing amid plans to set up an appeal authority.
Deputy director-general in the Department of Energy Ompi Aphane told Parliament’s portfolio committee on energy yesterday the Cabinet had approved the National Energy Regulator Amendment Bill, which would provide for the creation of an appeal mechanism against Nersa’s rulings.
“We are looking at a two-tier regu- lator with a commission and a review board, similar to the Competition Commission (system),” he said.
Mr Aphane said the Cabinet had raised some concerns about how the review board would work, and the department was dealing with these.
Eskom has been aggrieved over its treatment by Nersa, which has on several occasions ruled that the tariff increases proposed by the utility did not measure up to required standards of efficiency.
In 2013, Eskom was granted an 8% tariff increase a year for the period up until 2017-08, instead of the 16% it requested. The lower-than-expected tariff has contributed in a large part to the cash flow crisis at Eskom. In June, Nersa also turned down Eskom’s request for a selective tariff reopener, that would have caused electricity tariffs to rise 25.3% instead of the 12.69% granted for 2015-16.
Mr Aphane was part of a large delegation from his department that briefed the committee on its performance over the past two quarters.
Among the other issues reported was the progress on nuclear procurement. The officials told MPs that two studies had been completed last year. The first looked at financing options, models and solutions for the nuclear build programme, and the second at the economic effect of the localisation of the nuclear programme.
Acting director-general Wolsey Barnard said the department was in talks with the Treasury’s procurement office on how to proceed.
“We are dealing with the financial modelling and looking at what is on the table. That process is happening at director-general level,” he said.
Asked by the Democratic Alliance’s Gordon Mackay whether the financing and economic impact reports would be provided to the committee for scrutiny, Dr Barnard said the reports were still being processed internally.
Also in preparation for the nuclear build, the department is to fast-track amendments to the National Nuclear Regulator Act and the National Radioactive Fund Bill, and will propose a draft Nuclear Energy Bill.
Chairman of the committee Fikile Majola said last week he would propose to the committee that it hold public hearings on the nuclear energy procurement, which he said could not be entered into secretly. Yesterday he said a discussion on how to proceed in the matter would take place at the next committee meeting.
Energy Minister Tina JoematPettersson, who had been expected to address the committee yesterday, cancelled her engagement while the meeting was under way.