Eskom must come clean on coal, groups tell Nersa hearings
Eskom was sharply criticised at National Energy Regulator (Nersa) subcommittee hearings for trying to keep some of its operating data secret.
This especially related to the utility’s coal costs that were overshadowed by its dealings with the Gupta family.
The castigation comes amid widespread criticism of the parastatal for recently submitting a one-year revenue application for 2018-19 that seeks permission from Nersa to deviate from the multiyear price determination (MYPD) methodology and minimum information requirements used for tariff applications.
The utility is again pleading that it is short of money.
"Eskom has put forward the best information we have," Calib Cassim, Eskom GM for financial planning and economic regulation, said.
But he also said the utility’s systems were unable to provide disaggregated financial data related to coal purchasing, handling and other costs at the level of each of its power stations.
Presentations to the Nersa subcommittee from Business Unity SA (Busa), the Organisation Undoing Tax Abuse (Outa), Greenpeace Africa and a member of the public were all scathing. They said operating transparency and the full public provision of information was critical to Eskom’s functioning.
Nico Bruwer, a member of the public, said in his presentation that Eskom had employed 43.5% more staff between 2006 and 2016, despite sales of electricity as measured in gigawatt hours having remained stable during this period. "The only conclusion is that Eskom did not manage [itself] well," he said.
This added further question marks over its ability to manage a nuclear build in SA.
Bruwer also said Eskom debt of R478bn exceeded annual revenues of R168bn by a factor of 2.93. That meant the utility relied on cost increases and not on operating efficiencies.
It also meant Eskom was not investment grade and relied on government support.
Outa spokesman Ted Blom said Eskom had missed all Nersa deadline extensions for the third iteration of the MYPD ending in March 2018. The civil action organisation had earlier indicated it suspected the reason Eskom wanted to hide its operating statistics was because they included "Gupta coal".
He also said there appeared to be a deliberate attempt by Eskom to avoid accounting for coal purchases, especially relating to "ongoing corruption, fraud and mismanagement" at the utility.
Subcommittee panel member and Nersa CEO Christopher Forlee asked Busa presenter Jane Molony whether there were any "specific deal-breakers" in rejecting Eskom’s application for a tariff increase.
"I would have to come back to you on that," she said. But she said Eskom needed to plug the gaps in the information it had provided, especially about coal.
Happy Khambule of Greenpeace Africa told the Nersa subcommittee that Eskom’s evasive tactics left the regulator "powerless".
"Eskom is the lifeblood of SA — so the level of its transparency needs to be increased in the public interest," he said.