Subsequent to the National Energy Regulator (Nersa) hearings on Notified Maximum Demand rules held in Pretoria last Friday, Ted Blom, a partner at Mining & Energy Advisors has uncovered further irregularities and first confirmation that Eskom’s revenue is overstated by billions of rands.

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Although previous irregularities uncovered by Blom amounted to hundreds of Billions of rands through inflated expenditure and asset valuations on the expenditure side, these new skeletons illustrate how Eskom has been misapplying the rules around notified maximum Demand charges, reflected in customer accounts as “Network charges” from possibly as early as 2004.

Blom has been requested by Nersa to investigate how Eskom since 2013, and possibly as early as 2004, has charged up to R275.04/ Kva network capacity charges as a penalty of over ten times the actual charge which should be no more than R22.92/Kva.

Blom has confirmed that these excess charges have been applied to high usage industrial customers and municipal customers. “The exact impact on household customers will still need to be determined but is estimated to amount to thousands of rands per household over the relevant period”, states Blom. “This explains why many customers receive excessively high accounts despite no usage during shutdown periods.”

What has become clear is that Eskom has overcharged municipalities by billions of rand, an overcharge which might very well be the reason over 80% are failing to deliver or maintain other essential services, including water and sanitation. These excessive and possibly fraudulent electricity charges are passed onto consumers by municipalities hoping to recover whatever they can to avoid being cut off by Eskom.

Blom is currently compiling an affidavit to lay charges and launch an investigation into the possible fraudulent Eskom charges.

Interested parties can follow the proceedings on www.eeco.co.za.

ENDS

Ted Blom, partner at Mining & Energy Advisors and Energy Expert Coalition – 082 857 2534

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