Eskom statement on NERSA remittals
Thursday, 28 January 2021: Eskom notes the three National Energy Regulation of South Africa (NERSA) decisions made on 28 January 2021. These are:
- The implementation of the FY 2019 regulatory clearing account (RCA) decision
- The decision on Eskom’s FY 2019 supplementary application made in accordance with the High Court judgment and order
- The reviewed decision made on Eskom’s FY 2015 to 2017 RCA decisions in accordance with the High Court judgment and order
The implementation of the FY 2019 regulatory clearing account (RCA) decision
NERSA has decided that an amount of R13.2bn of efficient costs incurred by Eskom during the FY 2019 will be recovered in FY 2022 (R6.6bn) and FY 2023 (R6.6bn). Eskom had requested that the full amount be recovered in FY 2022.
NERSA’s two decisions in accordance with High Court judgments and orders
These refer to Eskom’s supplementary application and the reviewed decision made on Eskom’s FY 2015 to 2017 RCA decisions. Eskom notes these decisions and will have to analyse whether NERSA has made its decision in accordance with the High Court judgement and court order.
All three decisions refer to costs that have been determined to be efficient by NERSA. The efficient costs have been incurred between FY 2015 to FY 2019, which Eskom can only recover at the earliest in FY 2022. This implies delays up to 7 years. It is envisages that NERSA will allow the recovery of these costs in FY 2022. This will allow the smoothing of the tariff increase and minimise burden on the Government.
It is best to enforce the “User Pay” principle, where the consumer of electricity pays for the efficient cost of electricity. The efficient costs do not go away. Eskom is required to depend on more and more debt as well as further equity support from Government to continue to provide the electricity service. Thus, the consumer is continued to be provided a subsidy funded by the taxpayer, which has a negative impact on other Government’s priorities.
ENDS
