January 24, 2018

Eskom transferring mismanagement burden to consumers – Chamber of Mines

South Africa’s Chamber of Mines (COM), which represents 90% of mining companies, has expressed misgivings about the practice by Eskom, the country’s state owned power utility, of applying for tariff increase from the National Electricity Regulator of SA (Nersa) to recover the loss of potential revenue caused by maladministration.

Reacting to Eskom’s regulatory R22 billion Regulatory Clearing Account (RCA) application to the National Electricity Regulator of SA (Nersa) in respect of 2013/14:  Chamber of Mines CEO, Roger Baxte,  says: “The Chamber does not support the recovery of costs and lost revenues that could have been avoided by the utility’s better management.

“The RCA would also penalise these customers for Eskom’s own failure to supply sufficient electricity and at the same time reward Eskom for its operational failures. On the whole it appears that Eskom’s customers are expected to bear an excessive share of the revenue risk.”

On the other hand, Baxter says the COM supports Eskom’s intent to resolve South Africa’s long-term energy crisis and has no objection to the recovery of unforeseen costs arising from circumstances that Eskom cannot control.

Meanwhile, Nersa has authorised a 9% price increase. Nersa had applied for a 15% increase.

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