No Christmas present for Eskom

Tested consumers will now have to wait until the new year for news of what is expected to be a substantial rate hike.

Energy regulator Nersa has realized the pressure to set Eskom’s tariffs for 2024/25, now has until January 12 to do so.

The High Court in Pretoria previously ordered Nersa to make a decision “on or before December 24, 2022”.

It was still unclear on Tuesday whether the company will release its long-awaited financial results for 2021/22 before Christmas.

Asked about reports that Eskom will hold its AGM on Friday (December 23), with a media and stakeholder briefing afterwards, group CFO Calib Cassim said that has yet to be confirmed .

Eskom restated its results for 2020/21 after the appointment of new auditors, widening its loss by 38% to more than R25 billion. It has missed the statutory end-of-September deadline to submit its results for the year ending March 31, 2021, as well as the self-imposed extended deadline of November 30.

This was extended further, to December 30, but Cassim previously told Moneyweb that he hoped to finalize it before Christmas.

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Eskom chief operating officer Jan Oberholzer has revealed that Eskom has already spent double its upwardly-adjusted diesel budget in an effort to keep the lights on, and this is expected to have a big impact on figures to be announced.

Fee increase

Eskom has requested a 32% tariff increase for 2023/24 and another 10% the following year.

Included in that amount is a court-ordered repayment of R15 billion of part of the R69 billion over three years that Nersa illegally deducted from Eskom’s permitted income in lieu of a capital injection from government of the same amount. It also included R1.7 billion, which is part of a recovery in respect of the Regulatory Compensation Account (RCA) mechanism intended to mitigate the risk to Eskom and customers if the assumptions underpinning the revenue decision they develop differently from reality.

Moneyweb previously reported that although the court order only covered one year, Nersa decided to deal with Eskom’s revenue allocation for both 2023/24 and the following year at the same time.

READ ALSO: Eskom, Nersa settlement could cost consumers dearly

Its electricity subcommittee at the end of November made a recommendation to the energy regulator for an amount which, it was argued in an open meeting, varied little from what Eskom was asking for in terms of primary power, international purchases, the environmental tax and the carbon tax. and research and development.

Although figures were not disclosed, it was clear that the approval included a much larger provision for diesel to fire Eskom’s open-cycle gas turbines.

It was clear that, having to adhere to several adverse court rulings in which Eskom successfully challenged Nersa’s rate determinations, officials were unable to substantially limit revenue and subsequent rate increases.

The regulator was expected to make a decision based on the recommendation at this stage, but the item was removed from the agenda.

On December 14, the subcommittee and officials held a workshop, but were unable to draft a new recommendation that incorporated the guidance provided by regulatory members. They asked for more time, which was granted, although full-time electricity regulatory member Nhlanhla Gumede warned everyone that the December 24 court deadline must be met.

READ ALSO: Why Nersa wants an Eskom tariff review

Nersa, however, approached the court seeking an extension, which was granted on Tuesday (December 20) with just four days to spare.

Eskom did not oppose the application for the decision to be completed by January 12, and a court order was made.

Source: Eskom

Shortly after 6pm on Tuesday night, Eskom announced it would return to stage 6 discharge, having moved to stage 5 in the morning.

“The breakdown of 6 generating units during the day has necessitated the escalation of the discharge stage,” Eskom spokesperson Sikonathi Manthsantha said in a voice note. It was due to reduce to Stage 4 at 05:00 on Wednesday.

This article originally appeared on Moneyweb and has been republished with permission. Read the original article here.

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