The National Energy Regulator of South Africa (NERSA) revealed significant decisions made during its meeting held on July 30, 2024. These decisions include approvals for Eskom’s Regulatory Clearing Account (RCA) balance, the issuance of a new distribution license, and the publication of a consultation paper on congestion curtailment.
1. Approval of Eskom’s Regulatory Clearing Account (RCA) Balance
NERSA has approved Eskom’s RCA balance of R8.095 billion for the 2021/22 financial year. This balance will be recoverable from standard tariff customers, local Special Pricing Arrangement (SPA) customers, and international customers. The detailed breakdown of the RCA balance is provided in Table 1 below:
Table 1: RCA Balance for the 2021/22 Financial Year
| Category | Decision | FY2022 Actuals | FY2022 Variance | RCA Adjustment | RCA FY2022 NERSA Adjustment | NERSA Decision |
|---|---|---|---|---|---|---|
| Revised Return | 13 123 | 12 946 | -177 | -177 | -90 | -267 |
| Expenditure | 57 019 | 73 966 | 16 947 | -9 825 | 7 122 | -4 825 |
| Primary Energy | 68 330 | 84 729 | 16 400 | 766 | 17 166 | -10 853 |
| Independent Power Producers (local) | 40 631 | 36 714 | -3 917 | -3 917 | 0 | -3 917 |
| International Purchases | 3 426 | 5 306 | 1 880 | 1 880 | 0 | 1 880 |
| Depreciation | 66 279 | 58 151 | -8 128 | -8 128 | 0 | -8 128 |
| Research & Development | 151 | 149 | -2 | -2 | 0 | -2 |
| Levies & Taxes | 7 266 | 7 512 | 246 | 246 | 0 | 246 |
| Revenue | 233 229 | 246 520 | -13 291 | 22 814 | 9 523 | 0 |
| Service Quality Incentives (SQI) | – | 69 | 69 | 69 | 0 | 69 |
| RCA Balance due to Eskom/(Customers) | 23 778 | -15 768 | 8 012 | – | – | – |
| Nuclear Decommissioning from RCA 2013/14 | – | – | 83 | 0 | 83 | 83 |
The implementation plan for the 2021/22 RCA balance is under development for approval by the Energy Regulator.
2. New Distribution License for Inkosi Langalibalele Local Municipality
NERSA approved the issuance of a license to operate a distribution facility to Inkosi Langalibalele Local Municipality, following the disestablishment of Umtshezi Local Municipality. Inkosi Langalibalele Local Municipality will continue to charge tariffs as approved by NERSA and has been requested to apply for a trading license in accordance with the Electricity Regulation Act, 2006.
3. Rejection of Eskom’s Grid Capacity Preservation Request
The Energy Regulator did not approve Eskom’s application to preserve grid connection capacity for public Independent Power Producers (IPPs) in anticipation of the upcoming Bid Window 7 procurement process. The application was rejected because Eskom failed to identify specific customers or classes of customers it intended to discriminate against, and did not provide objectively justifiable differences regarding such customers.
4. Consultation Paper on Congestion Curtailment
NERSA has approved the publication of a consultation paper on Eskom’s application for congestion curtailment to be treated as a constrained generation ancillary service. This will allow Eskom to compensate Renewable Energy Power Plants (RPPs) for energy curtailed due to grid congestion.