The National Energy Regulator of South Africa (Nersa) has confirmed that it received an application from Eskom on April 10 in relation to a 62c/kWh tariff offer for the ferrochrome sector and has indicated that the Energy Regulator is aiming to reach a decision by the end of June.

Nersa’s electricity subcommittee is scheduled to approve, on April 17, the publication of a consultation paper on the amendment to the Negotiated Pricing Agreements with the Glencore-Merafe Chrome Venture and Samancor Chrome ferrochrome smelters to provide the tariff relief.

Nersa has confirmed with Engineering News that the consultation paper, the publication of which will effectively launch the public comment phase, will be accompanied by an indicative timeline for both written and verbal comments.

The application, Nersa adds, will be evaluated through public consultation with affected stakeholders followed by a decision by the Energy Regulator, Nersa’s highest decision-making structure.

“The application will be evaluated according to the Interim Framework for Long-Term Negotiated Pricing Agreements,” it added.

Asked how Nersa would ensure transparency of the terms and conditions of the tariff offer, the regulator said the application would be released, while its reasons for decision would be published after the Energy Regulator had made its determination.

Eskom announced on April 10 that it had concluded agreements with Glencore-Merafe Chrome Venture and Samancor Chrome on the tariff and the terms and conditions, but that the agreements remained subject to Nersa’s approval.

The conditions were not provided, but it was indicated that the deal would be for at least five years.

The 62c/kWh offer is well below the 135c/kWh associated with the initial NPA and also below the interim 87.74c/kWh interim tariff approved for the ferrochrome smelters by Nersa at the end of January.

The ferrochrome industry has indicated that 62c/kWh is required for it to sustain smelting operations in South Africa, much of which has already closed, and to prevent it from implementing large-scale retrenchments.