Eskom to submit complete revenue application to Nersa

Sunday, August 13, 2017

Eskom says it will submit a complete revenue application to the National Energy Regulator of South Africa (Nersa) for the 2018/19 financial year.  

On Friday, 11 August, Nersa announced its decision that no condonation would be granted to Eskom’s request to deviate from meeting certain requirements of the Multi-Year Price Determination (MYPD). 

“In its reason for [the] decision, Nersa guides Eskom in making assumptions for certain of the MYPD methodology and MIRTA [Minimum Information Requirements for Tariff Application] requirements that could not be met. 

“As an example, Eskom is not in a position to attribute burn costs and volumes to particular contract types. This is due to coal stockpiles not being distinguished in accordance with each coal contract type,” said Eskom. 

Nersa has required Eskom to use the purchase ratio for the coal burn rate. This will be done for regulatory purposes, which vary from the accounting treatment of coal costs. 

The power utility had requested exemption from providing information, as required by the MYPD. This included primary energy (disaggregated coal volumes, coal handling and water costs), and Research and Development (conducting consultation). 

Eskom also requested exemption from providing MIRTA information, including segmented cash flow statements, split of sales revenues between regulated and non-regulated industries, projected ten-year sales forecast, coal purchases and burn, environmental levies and deferred debits and credits. 

Eskom now says it will update the revenue application, with assumptions, as guided by Nersa, for the relevant areas where condonation was not granted and submit to Nersa by 25 August 2017. 

“Eskom has always provided Nersa with extensive information for their analysis. Eskom is committed to continue this practice,” said the power utility. 

The MYPD 3 period comes to an end by 31 March 2018. Eskom says it is hoping for a timeous revenue decision from Nersa, which it will implement from 1 April 2018. 

In February, the regulator allowed Eskom to raise tariffs by 2.2% in the 2017/18 financial year. –

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