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Eskom warns of constrained power, still awaits Nersa’s RCA decision

15th May 2014

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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As more warnings of a “severely constrained” power system emerged, State-owned power utility Eskom said it was only expecting the determination of its regulatory clearing account (RCA) balance from the National Energy Regulator of South Africa (Nersa) later this month.

The electricity- and financially strained utility, which previously anticipated a decision in April or May, had submitted the application during the last quarter of 2013 for the undisclosed RCA balance for the second multiyear price determination period (MYPD2) from April 1, 2010, to March 31, 2013.

Engineering News had previously reported that Eskom indicated its intention to make more intensive use of the RCA in an effort to close the gap between actual revenue and costs when compared with revenue allowed by Nersa under MYPD2 and MYPD3.

The regulatory mechanism would allow Eskom to adjust for the over- or under-recovery to be recovered through the electricity tariffs in the following or subsequent years.

Once the balance was approved, a decision would have to be made regarding the timing of the liquidation or recovery of such a RCA balance, acting Eskom CEO Collin Matjila said.

But any potential upward tariff adjustments would only occur post April 1, 2015.

Eskom was currently operating under the MYPD3 tariff framework, through which Nersa granted the utility five yearly increases of around 8% for the period beginning April 1, 2013, through to March 31, 2018, leaving the utility with a R225-billion financial shortfall.

Meanwhile, Eskom issued a warning on Thursday as electricity demand surpassed supply, with the next two weeks expected to remain tight owing to the unavailability of some of its generating units.

“Eskom will use all [the] necessary emergency resources at its disposal, but should the demand not decrease, load shedding will be implemented as a last resort to protect the national grid from a total shutdown,” the company said in its twice-a-week system status bulletin.

Including the operation of the open cycle gas turbines – which, with a R1-billion monthly bill, was pushing Eskom further into the red – electricity supply was expected to fall short of Thursday’s 33 311 MW peak demand, with only 32 500 MW available capacity.

Eskom’s current planned maintenance stood at 2 300 MW, with unplanned outages of 8 500 MW.

“Eskom calls on consumers to urgently switch off electrical heaters, geysers, pool pumps and all nonessential appliances. We require voluntary savings of at least 10% to manage demand,” the utility stated.

Peak demand of 31 889 MW was expected on Friday, followed by 30 978 MW on Saturday, 31 136 MW on Sunday, 33 770 MW on Monday, 33 759 MW on Tuesday and 33 756 MW on Wednesday.

Edited by Creamer Media Reporter

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