SA Utility Responds to Stakeholder Concerns

South African state-owned power utility Eskom has noted that it will submit a response to some concerns that emerged at the Western Cape leg of public hearings held by the National Energy Regulator of South Africa (NERSA) in Cape Town.

The parastatal confirmed in a statement that the written response will be submitted within seven (7) days or clarified at subsequent public hearings. Read more: Public hearings on Eskom regulatory clearing account commences.

Hasha Tlhotlhalemaje, general manager for regulation said: “We are encouraged that many stakeholders share our concern about Eskom’s sustainability and agreed to the recovery of prudent and efficient costs already incurred.

“We have also noted concerns around irregularities, mismanagement and corruption at Eskom and would like to reiterate what our interim Group Chief Executive Phakamani Hadebe said recently, that we are addressing all governance issues.”

Tlhotlhalemaje added: “To this end, Eskom is dealing decisively with executives and employees who were accused of engaging in fraud and corruption. We are also supportive of the various investigations, which are currently underway and will participate to contribute towards their objectives being met.

“These investigations include Parliament’s Portfolio Committee’s Inquiry, the judicial inquiry under the leadership of Deputy Chief Justice, Justice Zondo and the Special Investigation Unit recently announced by the President.”

Adhering to policy

“We would like to give an assurance that we have ensured that principles enshrined in the multi-year price determination (MYPD) methodology were adhered to in making regulatory clearing account (RCA) applications for the 2nd, 3rd and 4th years of the MYPD 3 period. Eskom did not submit a revenue application that would result in a tariff increase in this financial year but rather RCA applications, which are backward looking and based on audited actuals of what Eskom has already spent in the provision on electricity,” Tlhotlhalemaje noted.

According to the GM, “some stakeholders raised a concern about the amount of the RCA claim. Eskom explained that the reason for the three RCA applications being addressed in one year (2018) was court processes that were brought against NERSA and Eskom by stakeholders from March 2015 to August 2017 related to the RCA decision for year 1 (2013/14).

“We are requesting NERSA to make a decision on our application for the three years totalling R66bn and also the phasing of the implementation of the allowable amount that will balance the sustainability of Eskom with impact on consumers.”

The utility added that policy issues also emerged but these could not be addressed by Eskom. In addition some stakeholders raised concerns around the current state of Eskom including its structure.

Tlhotlhalemaje explained that while these issues are important as they impact stakeholders, the circumstances in the years of the RCA application would have been very different