Total Eren and EDF Renewables have signed four 25-year long term Power Purchase Agreements (PPA), for four solar power projects totalling 716MWp of installed capacities in northern India.
These projects have been awarded to EDEN Renewables India, their solar photovoltaic equally owned joint venture in India.
With planned production of nearly 1,200GWh per year, these solar PV projects will generate the energy required to meet the annual electricity needs of 1.1 million Indian households, Total said in a company statement.
Construction is due to start by the end of this year and commissioning is expected towards the end of 2020.
Through their local presence and their team of experts based in Delhi, EDEN Renewables India and EDF Renewables and Total Eren already operate four solar power plants in India totalling 207MWp of installed capacity in the States of Rajasthan, Uttarakhand and Madhya Pradesh.
Fabienne Demol, the executive vice president and global head of business development for Total Eren, commented: “We are delighted to have signed these PPAs for our four solar power plants, which will contribute to meeting the energy needs of the population in Uttar Pradesh and Rajasthan and to the development of renewable energy projects locally.
“We are multiplying our Indian installed capacity by four! These signatures represent an important milestone in our development in this market, which still offers significant growth opportunities. I look forward to working on other renewable energy projects in India with our partner EDF Renewables, and through our joint subsidiary EDEN Renewables India, which plays a key role in achieving our local ambitions.”
Frédéric Belloy, the executive vice president for international operations at EDF Renewables, stated: “We are pleased to have signed these Power Purchase Agreements for the benefits of Rajasthan and Uttar Pradesh people, which will enable them to have access to clean electricity.
“These large-scale projects are a lever for local economic development, they enable us to strengthen our presence in India and consider new projects in this country which represents a strategic market for EDF Renewables. These landmarks projects fit perfectly with the EDF Group’s Cap 2030 strategy of doubling its renewable energy capacity in operation between 2015 and 2030 in France and worldwide.”
Source: Esi-Africa.com
The Chief Executive Officer of Chamber of Bulk Oil Distributors (CBOD) in the Republic of Ghana, Senyo Hosi, has underscored the need for petroleum downstream regulators in the West African sub-region to collaborate and institute mechanisms to deal with fuel smuggling and other illicit activities in the downstream sector.
In his view, although Ghana’s National Petroleum Authority, headed by Alhassan Tampuli, in collaboration with other relevant stakeholders, is doing its best to address the issue, smugglers keep doing it because there is no common platform to allow each country to monitor to ascertain whether BRVs that are marked for export actually get to their destination with the same quantity or not.
Contributing to a panel discussion on the topic: ‘Illicit activities, fuel fraud and supply chain security in West African sub-region’, Mr Hosi shared his views on what the regulators in the sub-region can do to stem fuel fraud.
“We should be looking at how, for instance, if the thing is supposed to go to Mali, the Mali people should be able to see. You don’t need to remove the tracker out at the border. If we have a proper regional collaboration and, then, this becomes a standard or a harmonized exporting process across the region, anybody who wants to move a truck should be able to have that equipment that is traceable, trackable and is reachable with all the other things…the volume and pressure monitoring and all that across. If you want to be a BRV tracker, you should have that as part of the requirement.
“When you set off in Benin, anybody within the region, all the regulators, should be able to see, other than that, all you have to do is to pretend to have crossed and do au-turn. So, if we have to look at proper regional collaboration, we should deal with this problem,” he suggested.
Assistant Commissioner in-charge of Upstream Petroleum at the Customs Division of the Ghana Revenue Authority (GRA), Mr Benjamin Graham, noted that illegal fuel trade is denying the government of revenue, stressing that because each country is doing things differently, criminals are taking advantage of the situation.
Mr Graham, who described the situation as worrying, suggested that there should be a collaboration between customs at the sub-regional level.
“There should be customs to customs cooperation so that before any product leaves Nigeria or Togo, for instance, the information should be passed on to Customs. So, we expect that if you have lost 50 metric tonnes of diesel, it means that you’re going to account for the 50 metric tonnes. But if you go and account for 30 metric tonnes, it means that the 20 metric tonnes has been stolen for someone’s private gains. However, if information is sent to NPA, Customs or other relevant agency, then we can all monitor the vessel or BRV carrying the product,” suggested.
He further suggested the use of drones to monitor fuel pipelines to ward off criminals engaging in bunkering and siphoning of fuel in the sub-region.
Ghana’s Ministry of Energy has blamed the lack of comprehensive data on Ghana’s oil blocks as well as the small size of the blocks as some of the reasons for the low interest in the maiden licensing bid rounds for the six oil blocks.
The government, through the Energy Ministry, in October 2018, earmarked six oil blocks for exploration and production.
Sixteen oil and gas firms were initially selected early this year to the final stage of the Oil Licensing Round.
Three of the oil blocks-two, three and four were to go through competitive bidding process, while two blocks-five and six were supposed to begin direct negotiations.
Block One was reserved for the Ghana National Petroleum Corporation (GNPC).
The bidding round attracted multinational oil companies such US oil and gas giant ExxonMobil, British Petroleum, China National Offshore Oil Corporation, Qatar Petroleum and Aker Energy.
The rest are Cairn Energy, Global Petroleum Group, First E&P, Sasol, Equinor and Harmony Oil and Gas Corporation, Tullow Ghana Limited, Total, ENI Ghana, Vitol and Kosmos Energy.
However, most of the major oil firms pulled out of the bidding process at the eleventh hour.
ENI and Vitol, as well as Tullow Ghana Limited, were the only companies that submitted bids for block three, with First E&P submitting bid for block two.
Explaining the issue, deputy Minister for Energy in-charge of Petroleum, Dr. Mohammed Amin Adam explained that the government has done its assessment on the responses it received from the companies and has taken steps to address them.
“Basically, two major issues emerged, the first one is that the data that we already have on those blocks was not comprehensive enough and therefore they didn’t have enough data to enable them to make commercial decisions so we have to improve on the quality of the data,” he stated.
According to him, the second issue that came up was the size of the acreage, which he said was too small for most of the companies compared to the offers they get from other oil-rich countries.
“For some of them, their exploratory strategies require them to operate in larger acreages and there are a number of countries that will give larger acreages to companies. If they compare what they get as per their strategies with what they were offered, our acreages or blocks were smaller in size and therefore it was inconsistent with their strategies”
The Deputy Minister stated further that his outfit will take a decision after discussions with stakeholders and consultants to decide whether to revise the size of the blocks for future bidding rounds to make Ghana’s upstream sector more competitive.
Two armed robbers allegedly stormed a Shell filling station at Tema Motorway roundabout in the Republic of Ghana and made away with their sales and other valuables in what could be described as daylight robbery.
The incident was captured on the supermarket’s Closed Circuit Television (CCTV).
The two robbers were said to have dressed in a pair of jeans and shirt to match, entering the shop and holding the three female attendants on duty hostage at gunpoint.
Sources say the robbers arrived in a Toyota saloon car at about 11:51 am on Sunday, July 14, 2019 with a bag behind them, instructing the attendants to keep their mouth shut before marching them to the accounts office.
The footage which lasted 1:52 seconds also showed the robbers directing the attendants to lay down before demanding for money while they ransacked the cash boxes.
Energy expert Kojo Poku says Independent Power Producers (IPPs) in the Republic of Ghana cannot halt production due to government’s indebtedness to them.
According to him, shutting down will mean terminating their agreement with government.
His argument followed a statement issued by the Chamber for Independent Power Producers, Distributors and Bulk Consumers in the West African country in which they gave government a 7-day ultimatum to settle its debts to power producers in the country.
They threatened to completely shut down should the Power Distribution Services fail to pay its estimated 300 million dollars to them.
But speaking on TV3’s The Key Points programme on Saturday, Mr Opoku said because the IPPs have a bond with government, they must adhere to it, stating the IPPs cannot just issue threats.
“…But what I’m trying to add to the matter is that if somebody goes out there and issues these things that in eight days we will pull the plug, it is not that easy, you cannot pull the plug, you cannot do that.
“To pull the plugs and shut your machines down, do you know what it means? Every IPP has a bond, that bond is given to you that in failure of government paying you, call on the bond.
“When you call on the bond, what it means is that you are shutting down and leaving the country and terminating your PPA, so if you come out with some of those things, you cannot threaten your employer,” he explained.
Mr. Poku also said the Chamber for Independent Power Producers, Distributors and Bulk Consumers does not have the power to represent any power producer in the country.
“Let’s address this chamber thing, they do not represent anyone, I put it on record, they don’t represent anyone. The gentleman works for Asogli, all the numbers he has, he called ECG pretending he was not from Asogli and they gave him the numbers.
“…When I get these things at six o’clock in the morning and I call the people involved, and everybody tells me Kojo, there has been no meeting, we have not told anybody to go and issue threats to government.”
Speaking on the issue of indebtedness, Mr. Poku said the PDS does not owe the IPPs any money.
“…From 1st March going forward, the Ministry of Finance, the government through the Ministry of Finance…all the debt that existed in the energy sector. So, PDS took a clean slate. There was no indebtedness,” he explained.
He noted that the figures put out by the Chamber for Independent Power Producers, Distributors and Bulk Consumers as money owed the IPPs is not accurate.
“The numbers are being brought about by somebody just bringing about numbers, it is definitely not true.”
The Electricity Company of Ghana (ECG) and Power Distribution Services have cautioned the public against feasting on rumours and what they described as ‘uncollaborated’ information from unauthorized quarters and using them to create an impression that there is confusion between them and independent power producers in the country.
The Chamber of Independent Power Producers, Bulk Distributors and Consumer (CIPDIB), last week, issued a threat that its members would be compelled to shut down their plants if ECG and PDS failed to settle their $700 indebtedness.
In a statement issued and signed by the Chief Executive Officer of CIPDIB, Elikplim Kwabla Apetorgbor, it urged the government, through the Ministry of Energy, to compel PDS and ECG to expressly pay all accumulated invoices to the IPPs within the next seven days.
The statement noted that payment for power supplied to ECG had not been forthcoming, following the transfer of distribution business of ECG to Power Distribution Services in March.
With the four-year power crisis which was witnessed between 2012 and 2016 still fresh on the minds of a section of Ghanaians, those who did not want to be served with another load shedding, waded into the issue and raised questions.
This apparently did not sit well with ECG and PDS, thus, prompting them to issue a joint statement about the issue.
In a statement jointly signed by the Managing Director of ECG, Ing. Samuel Boakye-Appiah, and CEO of PDS, Rev. Ing. William Hutton-Mensah, it said “We wish to urge the general public to exercise due care in taking onboard rumours and uncollaborated information especially from unauthorized quarters.
“Any electricity supply challenge of significance will be properly brought to the direct attention of the general public, and its attendant mitigation arrangements will also be properly spelt out,” the statement added.
The statement further noted that “ECG continues to play the role of Asset Owner and Holder of the Power Purchase Agreements (PPAs) and, thus, continues to be responsible for handling all matters relating to the supply and payment for power the IPPs.
“We wish to assure that general public that ECG and PDS and the IPPs are maintaining very good working relations during the transition period, and we’re working through various challenges which alter not uncommon in such transition arrangements,” the statement said.
A former Chief Executive Officer of Ghana National Petroleum Company (GNPC), Alex Mould has raised concern about the lack of transparency in all the agreements backing some Liquefied Natural Gas (LNG) contracts government has signed with some companies.
According to him, the regasification project agreement contracts of Helios/China Harbor Engineering, (GNPC) and Rosneft LNG needs checking into.
In his view, there was lack of proper world-class advisors on technical, commercial and legal areas of all of the LNG regasification project agreements signed a year ago on behalf of government given the short negotiation period.
Helios and China Harbor Engineering and GNPC are constructing a terminal for the regasification project which is to be managed by Tema LNG Terminal Company.
GNPC, last year June, signed a new gas sale and purchase agreement (GSA) deal with Rosneft for the same natural gas supply agreement it had signed with Gazprom in September 2017.
This raised a lot of questions by energy experts then as to what necessitated the abrogation of the Gazprom contract and the cost associated with the abrogation of that contract.
“It has been a year now, yet, stakeholders including Parliament and civil society are not getting much information about the LNG regasification project from government through the Ministry of Energy or from GNPC. There are more standing questions begging for answers”, Mr Mould told the media in an interview at LNG Western Africa Conference 2019 in Accra.
“I’m not conversant with the details with the LNG re-gas contract. I’ve not seen any agreement. I believe that there’s supposed to be a breakwater being built. I don’t know who is bearing the cost of the breakwater, whether it’s the government as GHAPOHA or whether it’s going to be passed on to the project. If it’s going to be passed on to the project, we need to look at the total economics. We need to look at the supply of breakwater the gas.”
“But it’s very interesting that a transaction of this size and this magnitude and this difficulty would be signed within 3 months. It’s something that we need to look at. We need to make sure that all Is are dotted and the Ts are crossed. It involves bringing in the right consultants to ensure that the right feasibility is done before any decision is made”.
“It also requires to understand what security structure is behind the transaction and what commitment Ghana has made to the project. So time will tell”.
South Africa’s Minister for Mineral Resources and Energy, Gwede Mantashe, has underscored the need for a stable, predictable policy and regulatory framework to be created to spur investments and growth in the country’s energy sector.
Minister Mantashe was delivering his first energy budget speech in Parliament since the merging of his mineral resources portfolio with that of energy following South Africa’s general election in May this year.
Announcing a budget of R7.44 billion for energy, the Minister noted that the sector had contributed negatively to overall economic growth in the first quarter of 2019, declining by 6.9% and making a 0.1% contribution to an overall GDP decline of 3.2%.
“Despite the present economic climate and stringent allocations, we must ascertain a secure and sustainable provision of energy,” he said.
“In this context, (we must) utilise diverse energy resources in sustainable quantities at affordable prices, and mindful of environmental requirements, to support economic growth and development.”
Legislation
The Minister re-iterated his announcement in recent weeks that work is under way to develop the Petroleum Resources Development Bill “to ensure we provide policy certainty for the upstream petroleum sector that is relatively new to our economy yet with great potential to grow GDP, contribute to the fiscus and create much needed jobs”.
The Gas Amendment Bill, he said, intends to leverage available gas resources such as those in the Karoo and the recent discoveries in the Brulpadda field, assisting in the implementation of gas-to-power projects.
Integrated Resource Plan (IRP)
The IRP, which considers a diversified energy mix that includes all forms of energy technology such as cleaner coal, gas, hydro, renewables and battery storage, is in the process of being finalised at the National Economic Development and Labour Council (NEDLAC) and will be tabled before Cabinet for approval in September, the Minister said.
“As a country, we must avoid the currently polarised debate on energy, pitted as coal against renewables. The debate should be about the effective use of all of the energy sources at our disposal, to achieve security of supply.”
Development of a gas industry
To mitigate the impact of rising electricity prices on the cost of doing business in South Africa, greater use of natural gas is being explored, the Minister said.
While most of the country’s current supply of natural gas is from imports via the pipeline of the Mozambique Pipeline Investment Company (ROMPCO), more economical options need to be explored, including acceleration of South Africa’s own natural gas exploration activities.
Meantime, Mozambique will be engaged on the possibility of increasing and extending the supply of gas beyond 2023 and the importation of liquified natural gas (LNG) via the Coega Industrial Development Zone will be implemented.
Charting a successful way forward for South Africa’s oil and gas sector, building on the excitement of the Brulpadda Discovery, local content and increased gas to power potential will be at the forefront of discussions at the South Africa Showcase, a new feature for Africa Oil Week 2019 (Africa-OilWeek.com).
The Board of Directors of Libya’s National Oil Corporation (NOC) have approved the plans of the Zallaf Oil & Gas Exploration and Production Company in a bid to expedite exploration at the Atshan gas field (NC210 and NC151), with a view to supplying natural gas to the Obari power plant located 170 km away.
A feasibility study to further develop the field was presented to the NOC Board at corporation headquarters by Dr Khalifa Rajab, chairman of Zallaf’s management committee.
The Board authorized a series of comprehensive reservoir studies and a development plan to determine existing gas reserves, feasible production rates, and associated development and production costs.
NOC chairman, Eng. Mustafa Sanalla had previously discussed earlier this month the gas link proposal with the Minister of Planning, requesting a budget to fast-track project development to replace crude oil currently used as fuel at the plant.
Libya’s Presidency Council recently issued a resolution ratifying NOC supply of the power plant, while the General Electricity Company of Libya (GECOL) has been preparing for the station’s commissioning.
“Supplying natural gas instead of crude oil would increase the efficiency of the Obari plant and significantly reduce emissions. The switch to gas would also save at-least 15000 barrels per day that could be sold internationally – further increasing Libya’s export capacity and contributing to national revenue growth. We hope the Ministry will approve necessary funding so we are able to progress this strategic project as soon as possible,” Eng. Sanalla commented.
The meeting was also attended by NOC Board members, Eng. Abulgasem Shengheer and Mr Elamari M. Elamari; Dr Abdulsalam Abdullah Aziz, member of the exploration and production management committee; Mr Abdulhafid Abdullah Abu Ain, member of the operations, maintenance and materials management committee; and Mr Ahmad Erhumah, Zallaf’s planning and business development manager.
Norwegian E&P player Aker BP has made an oil find in the Liatårnet well located in the North of Alvheim and Krafla-Askja (NOAKA) area offshore Norway.
Aker BP said on Friday that it was completing the Liatårnet exploration well which holds a gross resource estimate of 80-200 mmboe.
According to the company, further data acquisition and analysis will be undertaken to determine the drainage strategy and recovery factor for the discovery, located in license 442 in the North Sea.
“The exploration success at Liatårnet is an encouraging result of a long-term strategy to unlock the exploration potential in the NOAKA area and provide the basis for an area development. The discovery represents a significant addition to the NOAKA resource base,” Evy Glørstad-Clark, Senior Vice President of exploration at Aker BP said.
Aker BP is the operator and holds 90.26 percent interest in license 442 with its partner LOTOS holding the remaining 9.74 percent.
In late June, the Petroleum Safety Authority (PSA) gave Aker BP a consent to use the Deepsea Stavanger rig for the drilling of the Liatårnet well, designated 25/2-20.
The Norwegian Petroleum Directorate granted a drilling permit for this well on Monday, June 17.
As for the NOAKA area it consists of the Frigg Gamma Delta, Langfjellet, Liatårnet, Frøy, Fulla, Frigg, Rind, and Krafla-Askja discoveries.
Including the preliminary volume estimates from the recent Liatårnet discovery, the gross resources in the area are estimated to be in the order of 700 mmboe.
Aker BP and the other partners have performed detailed studies of different development solutions for the NOAKA area. The development should capture all discovered resources in the area and facilitate future tie-ins of discoveries.
These studies have resulted in two alternative development solutions with one involving two unmanned production platforms supported from an existing host in the area while the other solution involves a new hub platform in the central part of the area which would entail processing and living quarters with Aker BP favoring the second concept.
Aker BP said in its 2Q financial report that it was planning to drill a new exploration well in the third quarter on the Nipa prospect in license PL 986 which has a pre-drill unrisked volume estimate of 35-115 mmboe.
Energy analyst and Chief Executive Officer of African Energy Consortium Limited, Kwame Jantuah, has called on the government to desist from appointing persons who lack the right expertise to head public institutions in the oil and gas industry.
According to him, the appointment of such individuals could lead to massive losses in the petroleum industry.
He said the government must subject heads of institutions such as the Ghana National Petroleum Corporation (GNPC) to thorough interviews and vigorous selection processes to determine their knowledge of the petroleum industry before they are hired.
“We need to change the way we put our CEOs and those in charge of the oil sector in place. Why should it be the responsibility of the President to choose GNPC’s CEO? Why should it be the President to choose the head of the Petroleum Commission?
“In some countries, if you have not worked in the oil industry for a long time and you are not seasoned, you can’t take over those positions. Brazil is one of them. You have to work in the oil industry and you have to be proven that you understand what it means to work in the oil industry,” Mr. Jantuah stated.
Source: Citinewsroom.com
Karpowership Ghana Company, an independent power producer has refurbished the only library serving academia in Ghana’s industrial city, Tema.
Prior to the renovation, the Tema Municipal Library had not seen any development regarding its state since it was built in the year 2000.
According to the Corporate Communications Specialist for Karpowership Ghana, the refurbishment of the library by Karpowership Ghana was crucial.
Ms Sandra Amarquaye explained that this is in tandem with the company’s objectives of impacting lives in the society they operate in.
“We do not only want to be known for providing reliable electricity to homes and industries in the country but also to positively impact society with this refurbished facility,” she said.
She said the library project is to help cultivate a culture of reading in the younger generation.
“It is a well-accepted term that readers are leaders and for this reason, we seek to contribute our quota to the future leaders of Ghana with this refurbished library,” she noted.
She also observed that the project was Karpowership’s own way of bidding farewell to the Tema community which had been its host for the last three years.
The company is fervently preparing to relocate its 470 MW Powership to the Sekondi Naval Base next month to utilize the country’s indigenous Natural Gas in the Western enclave.
Ms Amarquaye stated how the people of Tema had been continuously supportive of their operations since their inception in 2015 and had served as their home through the hospitality extended by the community.
“We are grateful to the community and the traditional leaders for their support through our stay here”.
The Chief Executive of the Ghana Library Authority (GLA), Hayford Siaw, was grateful to Karpowership for the social interventions.
He said, “the goal of the GLA is to ensure all the libraries we have are of modern standard for usage. The Authority has started embarking on some renovation works of the libraries across the country.”
“We will like to call upon organizations to emulate the works of Karpowership to assist with our libraries,” he said.
Mr Siaw noted that it was important for the younger generations to be nurtured to cultivate the habit of reading.The state of Tema Municipal Library before it was renovated
Panellists at the just-ended Ghana Energy Summit have called on government of Ghana to ensure that seismic and other geological data about the oil and gas sector are made available to investors seeking to participate in the country’s energy sector.
The West African nation’s recent licensing bid round for six oil blocks in the Western Basin was poorly patronized because of challenges including gaps in the legislative instruments as well as low quality of data on the blocks.
“Our basins are largely not de-risked, significant data gaps and low data quality still exist, and many companies continue to site our fiscal regime as disincentives. The recent results of Ghana’s first licensing round, although not satisfactory in terms of the response rate, has confirmed the fears about a developing industry and the risk associated with frontier areas,” Ghana’s Energy Minister John-Peter Amewu said recently.
Speaking on the theme ‘Leveraging the opportunities in the energy sector’, Joe Mensah, CEO of Kosmos Energy, and Mr. Kweku Andoh Awotwi-Managing Director of Tullow Ghana and Executive Vice President of Tullow Oil Plc, argued that accessing data in the sector is extremely difficult, and government needs to make such important data available to investors willing to invest in the space.
“Regulation is very, very important. Back in the day, we were trying to go to the data room to look at data and decide whether we want to go to a certain area to explore. It took us about three months to really agree on a one-page confidentiality document. Back and forth, and they finally went to the minister and said, ‘Please, we have to do something here’.
“Someone wants to come to your country and look at data and potentially invest billions of dollars, and you put this roadblock here to prevent that individual from coming here. What good is it for you?” Mr. Mensah said.
He asked government to make it much easier for investors, but also make sure the data is available early.
“Make the bar low enough for the person to come in; in fact, make it free for them to come in and look at the data. When they go out and discover or find something, then you can open up your chest and say ‘Now I want something. Now I want this’. That is the way you go about it.
“Today, there is nothing [no exploration] happening out there; and if we do not get our act together and accelerate the pace, we will plateau – and once we start coming down, what do you have to fill the pipeline? And yet we are projecting that we want to be producing 500,000 barrels/ day,” he added.
Mr. Awotwi also concurred: “Right or wrong, investors had a hard time getting access to the seismic data (geological) that underpins a lot of these things. Investors had a hard time getting access to that information, and maybe the lessons learnt is that government and the Energy Ministry need to be more accessible in terms of providing that data, and hopefully they will do so next time”.
Asked whether the inability to access relevant data on time affected Tullow’s chances in Ghana’s just-ended first oil-blocks bidding round, the astute energy expert said: “It might have been so. We certainly, as Tullow, made our position known to government that it was difficult to share data. We wanted to share data with investors and we had real difficulties. That was unfortunate; there was no need for that. One has to hope that we can learn from this”.
With effect from 1 July 2019, municipal tariff hikes in South Africa kicked in with rate increases ranging from electricity to refuse and solid waste collection to water.
The municipal tariff hike that sparked the most interest is the increase in electricity rates, which municipalities are being accused of not following proper procedures in implementing the hikes.
Tshwane municipality has been at the centre of this debacle, and the energy regulator, NERSA, has given the municipality seven days, to explain why the metro wants to increase fixed charges to customers.
The regulator stated that Tshwane municipality’s current application for a hike is incomplete.
Adhering to legislative requirements
Commenting on the development, Ronald Chauke, OUTA’s portfolio manager on energy, said: “As OUTA we are concerned about the failure by both City of Tshwane (COT) and NERSA to adhere to legislative requirements and timelines.
“For instance, in terms of the Municipal Finance Management Act, NERSA was supposed to approve the municipal tariffs by no later than mid-March each year to enable the municipalities to go and consult their customers, prior to the new tariff implementation date of 01st July. But this has not happened.”
Because of this failure, Chauke says, both NERSA and the COT are in breach of the law.
Chauke raised more concerns, stating: “What does it mean for NERSA to be conducting a public hearing for new tariffs that are supposed to be effective from 01st July 2019 on the 11th July 2019? Will NERSA make an urgent determination for the COT to implement interim electricity tariffs effective 01st July or will the previously applicable tariffs for the 2018/19 continue to be applicable until a NERSA determination is made?”
Conduct cost of supply study
According to OUTA, on Thursday (11 July 2019) COT acknowledged under oath during a public hearing, convened by NERSA, that they did not conduct a cost of supply study.
“OUTA views this as both parties are at fault,” said Chauke, adding “for instance, OUTA has sent recommendations to NERSA as part of the 2018 consultation paper on municipal tariff guidelines and benchmarks that NERSA must include the issue of compliance by conducting a cost of supply study as a license condition to its licensees (i.e. municipalities).”
Expressing disappointment, Chauke said: “But it seems NERSA has failed to include OUTA’s recommendation into the enforcement framework, hence, municipalities are continuing to take advantage of lack of punitive measures and enforcement by the energy regulator.”
In terms of implementing hikes without proper consultation with consumers, Chauke stressed that this demonstrates the challenges that exist in the electricity distribution industry (EDI) leading to customers being ripped-off.
He highlighted that the COT is proposing an increase from the existing fixed charge for residential customers from R56 to R120 on a monthly basis “under false pretences, as evidence revealed that when they were conducting their alleged flawed consultation process”.
“It is obvious that bold interventions and structural reforms must be initiated from the policy front and there must be political will to correct this unfortunate service delivery phenomenon,” said Chauke.
Source: Esi-Africa.com
