OUTA finds NERSA approved secrecy on Eskom coal costs

The Organisation Undoing Tax Abuse (OUTA) has discovered that the National Energy Regulator of South Africa (NERSA) agreed to let Eskom keep some costs secret more than a month after publicly announcing that the information must be available.

NERSA previously announced that it had declined Eskom’s request to omit certain costs from its revenue application, allowing it only to omit information on the regulatory asset base. That decision was ratified at a NERSA board meeting on 27 July 2017 and publicly announced. At the time, OUTA welcomed it.

But now it has emerged that NERSA subsequently decided to allow Eskom to keep certain coal costs secret.

OUTA’s Energy Director, Ted Blom, was one of the most vocal critics of Eskom’s secrecy application and had felt vindicated when NERSA’s original decision was announced. “However, that victory is now absolutely hollow,” says Blom.

“This indicates that the state capture movement may extend to NERSA as well, as the continued secrecy draws a veil over the corrupt Gupta transactions, which are believed to be worth billions of rand.

The information redacted from Eskom’s application released for comment includes coal burn costs, which Blom regards as crucial information for a transparent and fair pricing decision.

In the light of NERSA’s decision of 27 July, Blom asked NERSA for the missing information but two replies from NERSA indicated that another decision was taken on 4 September, allowing Eskom to block out the coal costs.

“The Energy Regulator, at its meeting of 4 September 2017, based on the application and reasons submitted by Eskom for confidential treatment of identified parts of the Eskom Revenue application in terms of the Promotion of Access to Information Act, 2000 (Act No.2 of 2000), decided that the information is confidential because its disclosure is likely to cause harm to the commercial or financial interests of Eskom,” said NERSA in its response to Blom.

NERSA failed to publish the decision of 4 September and the agenda for NERSA’s executive meeting of 4 September does not include any reference to this matter.

“This is not transparent. Given this sad state of affairs, we reserve our right to approach the courts for relief if needed,” says Blom.