Picture: REUTERS
Picture: REUTERS

The lobby group Organisation Undoing Tax Abuse (Outa) expressed opposition on Monday to Eskom’s bid to recover R66.6bn in revenue for the past three financial years.

Outa said in its application to the National Energy Regulator of SA (Nersa) under the regulatory clearing account (RCA), Eskom was seeking to claw back from the public for its mismanagement, including the misgovernance of its coal contracts.

The regulatory clearing account reconciles the costs and revenues allowed by Nersa when granting an electricity tariff increase with the actual costs and revenue incurred by Eskom.

The utility’s application relates to 2014-15, 2015-16 and 2016-17 financial years.

Eskom has claimed that it suffered an under-recovery of revenue and higher primary energy costs.

Outa energy portfolio manager Ronald Chauke gave a presentation to a Nersa public hearing on Eskom’s application.

He said the country could not afford "the incessant increases required of Eskom in the past decade, all due to poor leadership and mismanagement of its operations and capital expenditure programmes".

He said Eskom overspent on primary energy which includes coal and diesel for open-cycle gas turbines.

Outa believed primary energy spending on coal and diesel had been excessive to the tune of almost R100bn in the past seven years.

Eskom primary energy costs grew from R18bn in 2007 to more than R82bn in 2017, while electricity generation had declined.

"Eskom’s poor leadership has seen its spending and contracts in coal supply balloon out of kilter with its mandate to serve in the best interests of the public and electricity consumers.

"We furthermore believe that Eskom is now relying on this RCA process to recover from its mismanagement and this should not be allowed to happen," Chauke said.

He highlighted weak adherence to corporate governance prescripts and rampant corruption, as well as lack of transparency with regard to coal contracts.

"Outa recommends a zero percent [0%] clawback by Eskom and, instead, strongly proposes that Nersa should exercise its mandate to protect electricity customers from Eskom’s ongoing inefficiencies.

"It is now the people’s time to ‘claw back’ the ill-gotten gains of Eskom’s prior leadership mismanagement and we cannot accept Nersa granting any approval for either the regulatory clearing account application or Eskom’s call for an electricity price above the 5.2% increase which starts on April 1 for 2018-19."

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