NERSA’s MYPD approval of 8% instead of 16%: response by Eskom & SALGA

PMG 24 May 2013.

Date of Meeting:24 May 2013
Chairperson:Mr S Njikelana
Summary:

The meeting looked at the rationale behind the National Energy Regulator of South Africa’s price determination of 8% in response to Eskom’s request for a 16% tariff increase. The South African Local Government Association (SALGA) was asked to respond to the 8% increase on behalf of municipalities. Continue reading

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Eskom mulls ways to plug R225bn hole, hints to more support

Polity.org.za 24 May 2013.

Eskom reaffirmed to the Parliamentary Portfolio Committee on Energy on Friday that it would not, through efficiencies alone, be able to close the R225-billion financial gap arising from the lower-than-requested tariff determination for the coming five years.

Several other responses were, therefore, being pursued, including an initiative to identify whether additional support might be required from the utility’s shareholder, the South African government…

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Eskom in 3-year research project to test ten Nissan electric Leafs

Engineering News 29 May 2013.

Nissan South Africa (SA) on Tuesday announced a three-year research project with Eskom that will see the electricity utility test the usage patterns and requirements of the Leaf electric vehicle (EV), as well as its impact on the national power grid.

(Contributor’s note: Very strange, why Eskom, it should be SANEDI surely? What have Eskom to do with deciding on EV charging tariffs, that is NERSA’s job. I hope the costs of this three year project don’t form part of Eskom’s overheads. Nice for Avis too – what happened to the tender process? Why the exclusive to Nissan – what about the other EV manufacturers? How do the Leaf’s costs and subsidies compare to the Joule’s?).

The project comes ahead of Nissan SA’s rollout of the Leaf to the local market later this year, when it will become South Africa’s first commercially available all-electric vehicle.

The partnership with Eskom also follows pilot programmes with the Department of Environmental Affairs and the Technology Innovation Agency to create public awareness, and ultimately, commercially viable infrastructure for the use of EVs in South Africa…

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Eskom reviewing tariff decision – Gigaba

Sapa | 8th May 2013 | Engineering News

Eskom is reviewing the implications of Nersa’s decision to grant it a lower than requested electricity tariff hike, Public Enterprises Minister Malusi Gigaba said on Wednesday.

"We are studying it in detail, because we need to understand what will happen to Eskom’s operations through the build programme over the next five years," he said at a Cape Town Press Club breakfast.

Eskom welcomed the National Energy Regulator of SA’s ruling, because this was to the benefit of consumers, but it presented problems Eskom would need to deal with.

Eskom had applied for a 16 percent increase in electricity prices in each of the next five years. This would have more than doubled the current price, taking it from 61 cents per kWh in 2012/13, to 128 cents per kWh in 2017/18. Continue reading

Gas Amendment Bill 2013 approved

Engineering News 19 April 2013.

Cabinet has approved the Gas Amendment Bill 2013.

“This paves the way for the Bill to be published in the Gazette for public comment,” a Cabinet statement issued by the Government Communication and Information System said on Friday.

Uninterrupted supply and development of natural gas to the economy is critical…

(Contributor’s note: This should smooth the way for increased use of natural gas instead of coal or nuclear based power. The gas would come from Mozambique by pipeline and via imported Liquefied Natural Gas from new East African sources, and other international sources. This is in line with NPC recommendations to exploit natural gas as an energy source over coal and nuclear.)

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Gigaba hints to new Eskom support after ‘difficult’ tariff ruling

Mining News 22 April 2013.

A joint Eskom, Department of Public Enterprises (DPE) task team would “within weeks” deliver its verdict on the implications of the regulator’s February decision to grant the utility yearly tariff increases of 8% between 2013 and 2018 instead of the requested 16%.

The recommendations arising from the analysis could include policy proposals related, for instance, to issues such as the implementation of a mandatory energy conservation scheme (ECS), as well as suggestions of possible further shareholder support for the State-owned utility…

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Something must give, says Eskom on viability

BDLive | Apr 8, 2013 | Carol Paton

Experts differ after Nersa reveals reasons for 8% limit on tariff hike

ESKOM and independent analysts maintain that the utility cannot stay sustainable and cash-positive on the 8% tariff increase approved last week by the National Energy Regulator of South Africa (Nersa).

Eskom said on Sunday its reduced return on investment could affect its financial sustainability, and that it would now approach the government for a discussion on its mandate.

Nersa on Friday published its full reasons for the decision to grant Eskom an 8% tariff increase, slashing the utility’s return on investment, revising its depreciation allowance and cutting the fat out of its operating budget.

The result of the cuts is R100bn in savings over the five-year period covered by the application.

The reasoning assumes that although Eskom gets only half of the tariff increase it requested, it can remain financially viable and will not need to increase its borrowing, as the revenue shortfall is made up for by savings. Continue reading