Nersa to set up a clawback system

NO TIME: IT SUPERFICIALLY REVIEWED FIGURES

- Antoinette Slabbert

Regulator is apparently now relying on a later audit to check everything.

Municipal electricity consumers may in the future be subjected to retroactive tariff increases when energy regulator Nersa audits the figures on which municipalities based their tariff applications this year. If it finds the tariffs were set too low, they will be increased; if set too high, they will be lowered retroactively.

This emerged from discussions during a 24 June Nersa meeting at which regulatory members considered 33 municipal tariff applications. This is reminiscent of Eskom's clawback mechanism, where large increases are implemented in addition to the normal tariff increases to compensate Eskom for under-recovery in previous years.

This so-called Regulatory Clearing Account (RCA) mechanism has been widely criticised for creating uncertainty about future tariffs.

Deon Conradie, a part-time lecturer in tariffs at Wits Business School, said it significantly increases the risk for consumers - but he is sceptical about the legality of such a practice until the methodology is properly formulated, made available for public comment, and formally adopted.