South Africans are not only facing the heavy effect of drought and the continuous fall of the rand in the exchange market, but also, the recent electricity bills hike that has befallen them. The National Energy Regulator (Nersa) has today being the 1st of March 2016, approved a 9.4% electricity hike for 2016/17.
With the approved hike taking effect from April 1, Eskom would be able to recover R11.2 billion from standard tariff customers, Nersa chairman Jacob Modise announced.
Eskom was reported to have submitted an application to Nersa in November last year to recover R22.8bn, which the utility said it used to avert load shedding and possible power outage.
With its demand for a 16.6 percent increase, ESKOM argued that its current deficit, for which the additional tariff revenue was needed, arose from being forced to use expensive fuel for its gas turbines to keep the lights on.
On this, Modise said Nersa took its decision after extensive consultation with government, unions, small and intensive users, who engaged in public hearings in six provinces.”The public interest was also considered as well as input of stakeholders,” he said.
Evaluating the “regulatory clearing account” balance for the first year (2013/14 period) of the third Multi-Year Price Determination (MYPD3). Nersa discovered it amounted to R22.8bn but according to Energy expert Chris Yelland, Nersa only allowed half of ESKOM’s claims. Eskom only received R6.2bn of the R11.7bn it had claimed for due to reduced sales.
“Nersa also only allowed a small part of what Eskom claimed for diesel, i.e. R1.3bn compared with the R8bn Eskom claimed for diesel,” he added.
According to Fin 24, Nersa stated its decision that
- The RCA balance of R11.2bn be recoverable from standard tariff customers, local Special Pricing Agreements and international customers in the financial year 2016/17
- An amount of R10.256bn be recoverable from standard tariff customers for the 2016/17 financial year only.
- The average tariff for standard tariff customers be increased by 9.4% for the 2016/17 financial year only.
- The amount of R983m be recoverable from Eskom’s local SPA customers and international customers for 2016/17 financial year only.
- Eskom must submit a new MYPD application within three months, based on revised assumptions and forecasts that reflect the recent circumstances.
Not less than six public hearings were held on the application to increase tariffs, but they were totally opposed by civil organisations, businesses, unions and individuals on the base that would it be unaffordable and would place a heavy burden on consumers, especially the poor in the country’s economic fall outs.