Page 11 - AfrElec Week 23 2021

AfrElec TARIFFS AfrElec

Eskom asks to add $600mn

to future tariff income

SOUTH AFRICA SOUTH African utility Eskom has asked its reg- unlawfully subtracted from Eskom’s revenue in
ulator to allow it to add ZAR8.4bn ($616mn) to the period 2019/20-2021/22.
its tariff income, a request that will be unpopular NERSA and Eskom earlier agreed to write off
with customers, who are again facing rotating ZAR10bn of this amount, which was added to
blackouts. the current year’s tariffs.
Energy regulator NERSA has published Over and above that, there are three other
Eskom’s latest request for additional regu- NERSA decisions that Eskom has challenged in
lated revenues to include in its tariffs, a process court that still have to be determined that could
called the regulatory clearing account (RCA) push Eskom’s additional entitlement to above
methodology. ZAR90bn. All of this will have to be paid for by
If Eskom’s request is accepted, then the consumers in the next few years.
amount will be included in its tariffs for the Eskom has based its request for higher tariffs
2022/23 financial year. on lower than expected sales volumes in recent
Eskom’s tariffs are closely regulated by years, coupled with higher than expected costs.
NERSA, which has to base the utility’s future Eskom said that it had lost ZAR5.6bn in rev-
tariffs on revenue forecasts, which have not yet enues during the current year because of lower
been made available. sales volumes.
Eskom wants higher tariffs to compensate for The other big variance supporting Eskom’s
lower sales in recent years, as economic growth claim is ZAR4.9bn ($359mn) for primary
has stalled and the coronavirus (COVID-19) energy. While its coal burn cost was ZAR2.1bn
pandemic reduced demand. ($154mn) lower than projected, it spent
The regulator will hold virtual public hearings ZAR2.4bn ($176mn) more on diesel for
in July and has said it will finalise its decision open-cycle gas turbines (OCGTs) to minimise
near the end of August. the impact of load-shedding on the economy.
Whatever amount NERSA approves can be Start-up fuel oil cost the utility ZAR2.2bn
added to tariffs from 1 April, 2022 for end-users ($161mn) more than expected. Eskom explained
buying directly from Eskom and from July 1 for that heavy fuel oil is used for the start-up and
municipal customers. shut-down of a coal-fired power station and sta-
The request comes as NERSA and Eskom bilises the boiler flame on occasion, for example
have been locked in a legal dispute over the utili- when “operating at low load”.
ty’s tariffs and revenues. Eskom admits that the number of unplanned
This application comes as NERSA’s appeal outages and trips “were significantly higher in
is pending against a High Court decision the FY2020 than what was anticipated at the time
that it should add a further ZAR69bn ($5bn) of the 2020 application and determination”.™

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