South Africa News

Eskom wants clarity on Nersa calculations

Eskom says if its costs exceed the amounts determined by the national energy regulator, it won’t be able to recover the difference from consumers.

The utility has welcomed Nersa’s approval of an 18.65 percent electricity tariff increase for this year.

But it wants to know how the hike was calculated.

“When Nersa makes an allocation, for example the topical issue is turbines, the diesel costs, so Nersa makes a determination on how much it feels to be efficient as far as diesel costs are concerned,” said Hasha Tlhotlhalemaje, Eskom Regulations GM.

“So if Eskom uses more diesel than Nersa has determined then it needs to think about what are the funding options to be able to use that because we will not be able to recover it from the consumer.

“So those are the kinds of details that we would like to understand to help manage the business.”

While National Treasury is expected to take over large portions of the utility’s debt in the next budget, Eskom says the tariff increases granted by Nersa bring it closer to covering its own costs.

“Eskom is getting closer or is closing the gap between what is the efficient cost of electricity and the continuous subsidy it has been given to all consumers, so that gap is getting closer and therefore Eskom will be on a more sustainable route,” Tlhotlhalemaje said.

“However, there is a big debt burden and then National Treasury decides on how it will take over and the details have not been finalized.

“So it is possible that that will assist in the whole being able to become more sustainable as far as Eskom is concerned but we do not know the details until the Minister of Finance makes his announcement.”

Source: eNCA

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