Eskom is presenting its case to the National Energy Regulator of South Africa for a 16.6% tariff hike to recoup R22.8 billion in lost revenue.<\/p>\n
According to presentations made by the power utility, the biggest costs the company wants to recover is R11.7 billion for a shortfall in revenue, R8 billion in costs associated with the utility\u2019s peaking open cycle gas turbine (OCGT) plants and R2.4 billion for primary energy costs.<\/p>\n
The full breakdown is as follows:<\/p>\n
This is offset by the group’s net import\/export position (-R2 billion) and IDM (-R1.2 billion).<\/p>\n
The open cycle gas turbines cost the country just over R10.5 billion in 2015, due to load shedding. This was R8 billion over the projections from Nersa.<\/p>\n
According to Eskom, there was also a R10.5 billion jump in operating costs which it is not allowed to claim through the RCA policies, which is adding further pressure to the group.<\/p>\n
“Increasing the full RCA application in FY 2017 will increase Eskom’s cashflow by R22.8 billion,” it said.<\/p>\n
This will give Eskom the improved ability to meet financial commitments; improve financial rations to support its debt program; and enhance the balance sheet.<\/p>\n
The move would also bring certainty and stability that investors are seeking, and will improve investor confidence – impacting the group’s credit rating and funding security.<\/p>\n
“Notwithstanding (this), Eskom’s credit rating remains unfavourable,” it said.<\/p>\n
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