Eskom Tariff: South Africans Will Pay More For 2017/18 Financial Year


BuzzSouthAfrica has confirmed that the National Energy Regulator of South Africa (Nersa) approved a 2.2 percent Eskom tariff increase.

As learnt, the increase is for the 2017/18 financial year.

Nersa’s chairperson Jacob Modise confirmed the Eskom tariff increase while he was addressing media in Pretoria.

“The allowed revenue of R205 214 million for the 2017/18 financial year will now result in a percentage increase of 2.2 percent,” he said.

According to Modise, the allowed revenue is Eskom’s full year revenue, as determined in the Multi-Year Price Determination (MYPD3) decision.

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Record has it that Nersa approved an 8% average increase per annum for a period of five years, starting from the 1st of April 2013 to the 31st of March 2018 in the MYPD3 decision.

Stressing that the Eskom tariff increase decision was made in February 2013 as part of the MYPD3 decision, Modise pointed out that it’s a low percentage increase.

That he said, is so because of the base adjustments made in the preceding years as a result of the approved Regulatory Clearing Account (RCA) balances for Eskom.

“You will recall that as a result of the RCA reconciliation, the Energy Regulator approved 12.7% for 2015/16 and 9.4% for 2016/17 instead of the average increase of 8%.

“The 2.2% increase, taking into account the adjustments already given, maintains the approved allowable revenue for the last year of MYPD3,” he explained.

With that, he offered that the only decision to be considered by Nersa is the retail tariffs structural adjustments that arise out of the revenues.

“The only new matter that was considered by the Energy Regulator today was the potential financial harm that may be occasioned by Nersa not being able to process new RCA applications as a result of the interventions of the Gauteng High Court.

“In this regard, Nersa has decided to allow Eskom to make a new application that will be considered in accordance with Section 4 of the Electricity Regulation Act, should they wish to, which application will be considered through a full public consultation process.”

Afterwards, Modise remarked that the approved revenues of R205 214 million will cover all of Eskom’s allowed costs. Also, he identified that the decision by the Gauteng High Court has resulted in Nersa being unable to process RCA applications until its appeal has been heard and decided upon.

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From our gatherings, Nersa is appealing the North Gauteng High Court judgment in which the court discarded the regulator’s decision to grant Eskom a tariff increase.

Commenting on that, Modisa said: “nothing prevents Eskom from making an application to Nersa for relief should it consider any possible cash flow risks and implications thereof on its financial sustainability.

“The Energy Regulator would, upon receipt of such an application, embark on a public consultation process as required by the law before making its decision,” he added.