Eskom aims to claw back R22.8bn via tariffs

Cape Town – Eskom on Thursday submitted an application to the National Energy Regulator of South Africa (Nersa) to recover R22.8bn which the utility used to avert load shedding.

“We spent money on acquiring diesel and electricity from IPPs. When we overspend on those items we need to put our case to the regulator,” Eskom spokesperson Khulu Phasiwe told Fin24.

Phasiwe explained that the utility used a lot of diesel to avert load shedding in winter.

“If you can give evidence to the regulator you are in a position to get your money back ... you are able to claw back some of your expenditure,” he said.

Should Eskom’s application be successful Nersa could add an additional increase to any tariff hike that the utility is granted.

“Nersa’s regulatory rules allow Eskom to adjust for the over- or under-recovery of preceding years’ regulated costs and revenues through the electricity tariffs in subsequent years,” Eskom said in its statement.

Nersa will evaluate the “regulatory clearing account” (RCA) balance for the first year (2013/14 period) of the third multi-year price determination (MYPD3) amounting to R22.8bn.

The amount is roughly equivalent to the R23bn the government received for selling its stake in Vodacom to help Eskom plug a shortfall earlier this year.

The MYPD methodology requires Eskom to submit its RCA application to Nersa based on audited financial statements at the end of the financial year.

Nersa will review Eskom’s submission and undertake a “prudency review” of the costs as required by the methodology.

“This will inform the decision on the “quantum” of the RCA,” Eskom said.

Once the quantum is determined, Nersa will decide on the liquidation of the balance which will inform the adjustment of electricity tariffs.

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