The decision by the National Energy Regulator of SA (Nersa) to compel Eskom to reveal more information to support its request for a one-year increase in electricity tariffs was welcomed as a partial victory by the Organisation Undoing Tax Abuse (Outa) on Friday.
Eskom applied earlier in 2017 for a hike in tariffs for 2018-19. It has confirmed only that the requested increase would be "in double digits", but it is widely expected to be about 20%. At the same time, Eskom said it could not provide some details that the regulator required, including the valuation of its assets, coal consumption and supply contracts for each power station.
Eskom said on Saturday that it would provide Nersa with additional information.
South Africans have become increasingly fed up with annual hikes in electricity tariffs that far exceed the consumer inflation rate as they believe they are paying for Eskom’s operational inefficiencies, corruption and overruns on construction of its new coal-fired power stations.
At Nersa’s public hearings in July, organisations including Outa, Business Unity SA and Greenpeace Africa strongly objected to Eskom’s request to exclude certain information from its application, particularly on its coal contracts, as it has been widely reported that the utility has favoured coal mines belonging to Gupta-owned Tegeta Resources.
On Friday, Nersa told Eskom to provide all the information originally requested, except for the valuation of its regulatory asset base and details of deferred debits and credits. But when Eskom submits its next application for multiyear tariff increases, it must have revalued its asset base. It has 30 days to provide the rest of the data.
Outa spokesman Ted Blom said the civil rights organisation did not get everything it wanted, but the most important part of the ruling was that Eskom could not keep its application secret, in particular on its coal contracts.
Outa would continue pushing for Eskom to disclose the value of its assets. Blom said he believed Eskom had misled Nersa for the past 10 years by massively overvaluing its asset base. Outa intended to present an independent benchmark at the next public hearings.
Normally, Eskom applies for tariff increases for a three-year period, called a multiyear price determination, and recovers any shortfall through the regulatory clearing account. It was supposed to submit its fourth multi-year application by April, but asked to apply for a one-year hike because it was waiting for the final Integrated Resource Plan and Integrated Energy Plan for SA’s future energy mix.
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