Eskom presents cost recovery plans to Soweto

Date: May 14, 2018

Eskom on Friday presented its case in Soweto to recover a variance in revenue between what was allowed under the third multi-year price determination (MYPD 3) process and what was actually spent in the three years from 2014 to 2017, which amounts to R66bn. Senior executives presented Eskom’s capacity situation and showed how costs were incurred while Eskom was implementing its mandate of supplying electricity. Calib Cassim, Eskom’s acting chief financial officer explained: “The Regulatory Clearing Account (RCA) application under review is based on the MYPD 3 regulatory methodology and decision and principles followed by the National Energy Regulator of South Africa (NERSA) on the RCA decision for 2013/14.” “Variances can be linked to two key sources, which are increases in costs due to a changing environment and assumptions made for purposes of the MYPD3 revenue decision which did not materialise,” he said. The RCA methodology allows for certain elements of Eskom’s revenue and costs to be in favour of Eskom where its costs were higher than anticipated and in favour of the consumer in instances where Eskom spent less than planned.

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