Eskom
South Africa’s state-owned power utility, Eskom, has stated that the only way to implement better decisions in future will be through learning from past experiences.

Addressing the National Energy Regulator of South Africa in Midrand, Eskom’s group executive in generation Matshela Koko, assured the panel that at present the utility is practicing better decisions to provide good service, News24 reported.

Koko said: “We have become wiser in our risk management approach. You can only do that with the benefit of hindsight. We have learned, and today we do things differently.”

Eskom – competent 

Koko was part of a group which presented their case to the National Energy Regulator (NERSA) as to why the power utility needs more money for the next financial year, emphasising that Eskom has learnt to implement a balance between maintaining power generation plants, while supplying power and using less fuel.

Eskom, in its regulatory clearing account (RCA) application to NERSA, seeks to recoup ZAR22.8 billion ($13,543 billion) for its 2013/2014 financial year.

The electricity provider stated that the RCA application is an application for cost recovery and revenue adjustments based on actual past variances, not a revenue application based on future estimates.

Should the application be approved, electricity rates are predicted to increase at least by 16.6%.

RCA based on the 2010 GDP

News24 reported that Eskom explained the current shortfalls it is experiencing by comparing the GDP in 2010, which according to the utility was better than the current GDP and the weak performance of the rand.

The power utility is basing its forthcoming electricity increase plans on the 2010 GDP.

The revenue shortfall was primarily due to an increase in costs it incurred by utilising its diesel-fuelled open-cycle gas turbines (OCGT) in efforts to avoid load shedding, Eskom said. This practice saw Eskom reduce the amount of load shedding required – in a six month period last year there were no load-shedding incidents, besides two hours and twenty minutes of stage-one load shedding in September.

In conclusion, Eskom said if it had not utilised diesel powered turbines, South Africa would have lost an estimated ZAR25 billion ($1,573 billion) and the country would have suffered from power cuts throughout the year.