Public hearings into power utility Eskom’s application to make up for revenue variances kicked off in Cape Town.
Eskom is trying to recoup R66.6 billion through its regulatory clearing account (RCA) applications to Nersa.
Power utility Eskom tried to allay fears that its regulatory clearing account application would lead to a 30% tariff increase when it presented its case to recover costs already spent in the provision of electricity.
The RCA is a regulatory mechanism which allows Eskom to make up for the over- or under-recovery of costs as the multi-year price increases are based on forecasts.
Phakamani Hadebe, Eskom’s interim group chief executive, said: “We therefore rely on Nersa to review our application in line with the multi-year price determination methodology, which is a globally-accepted regulatory principle that reconciles variances between the projected and actual revenue and costs that Eskom incurred for certain elements.
“We have spent the money in the implementation of our mandate of providing electricity to South Africans by raising debt as it was not included in the revenue decision and need to repay those loans accordingly in order to ensure credibility with our lenders.”
Hadebe said that Eskom’s application only covers costs that were incurred efficiently and prudently as allowed by the RCA mechanism.
“We are aware and mindful of people’s concerns. It is therefore important to note that Eskom is on a path of recovery on governance issues that have marred our organisation in the recent past,” he said.