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Electricity Regulation Act, 2006 (Act No. 4 of 2006)


Regulatory Rules for Power Purchase Cost Recovery

16. Review process


16.1 The buyer may initiate an application to draw down the IPP control account subject to the provisions set out in rule15;


16.2 The application to draw down the balancing account will include the following:
16.2.1 Demonstration that the 2% trigger will be exceeded;
16.2.2 A reconciliation statement containing annual forecast power purchase costs and actuals for each recoverable cost component as set out in rule 11, and the reasons for cost variances;


16.3 Where actuals are not yet available for the most recent year, mid-term projections will be used in their place. In this case, any deviations from these projections and the final actual amount will be added to the balancing account going forward and reconciled as would otherwise be the case;


16.4 The buyer will arrange for an independent audit of the reconciliation statement to be provided to NERSA;


16.5 NERSA will want to assure itself that variations in costs have not been due to inefficient dispatch by the System Operator. In assessing the efficiency of dispatch, the Energy Regulator will also have regard to relevant conditions of supply and dispatch as set out in a PPA (such as ‘must run’ or ‘take-or-pay’ provisions) which would have been considered as part of the Energy Regulator’s initial authorization;