»Eskom receives an 18.65% tariff increase from NERSA«
Thursday, the National Energy Regulator of South Africa (NERSA) approved Eskom a tariff increase of 18.65%.
Eskom proposed a 32% price increase.
NERSA said that the 18.65% increase was based on its authorized price of 146.48c/kWh for the 2022/23 financial year when announcing its decision.
“The NERSA-approved revenue is R334bn for the 2024/25 financial year, which translates to a tariff of 195.95c/kWh, resulting in a 12.74% increase based on the tariff of 173.80c/kWh NERSA approved tariff for the 2023/24 financial year.”
The decision, said NERSA, was “based on the information at its disposal and the analysis of Eskom’s fifth Multi-Year Price Determination (MYPD5) revenue application for the 2023/24 and 2024/5 financial years”.
NERSA spokesperson, Charles Hlebela, in a statement said: “The allowable revenues… must be recovered from both Eskom standard and non-standard tariff customers (Negotiated Pricing Agreements and international customers) based on the previously approved tariff principles and structures using the Eskom Retail Tariff Structural Adjustment (ERTSA) Methodology, as approved by NERSA.”
He said that Eskom’s revenue application for the 2023/24 financial year, comprising Regulatory Clearing Accounts (RCAs) and court orders, was for R351 billion.
“NERSA’s approved allowable revenue is R318 billion after considering adjustments for inefficiencies and prudency reviews.
“For the 2024/25 financial year, Eskom applied for revenue of R381 billion, including RCAs and government injection, as per the court order. The NERSA-approved revenue is R352 billion after considering adjustments for inefficiencies and factoring the RCA as per the Energy Regulator decision of 14 December 2022,” reads the statement.
For the 2023/24 financial year, NERSA authorized a total revenue of R300 billion, which equates to a tariff of 173.80c/kWh.
“The NERSA-approved revenue is R334 billion for the 2024/25 financial year, which translates to a tariff of 195.95c/kWh, resulting in a 12.74% increase based on the tariff of 173.80c/kWh NERSA approved tariff for the 2023/24 financial year,” the regulator said.
Following Eskom’s filing of an application, the Energy Regulator said that it will review the ERTSA for the 2023/2024 financial year.
It said that all client charges will be subjected to further thorough prudence reviews, efficiency testing, and performance benchmarks.
The Energy Regulator said that it reached its judgments after following the proper regulatory procedures, which included posting Eskom’s revenue proposal and soliciting written feedback from interested parties. It also held public hearings to elicit feedback from affected and interested stakeholders.
“As a result, NERSA received approximately 2000 written comments from stakeholders, who raised concerns about affordability.
“It is important to note that Eskom’s revenue application for the 2023/24 and 2024/25 financial years was considered against various challenges that are affecting the South African economy. Accordingly, the Energy Regulator’s decision provides a balance between the sustainability of Eskom and the economic well-being of the consumers and the economy,” it said.
»Eskom receives an 18.65% tariff increase from NERSA«