Eskom has expressed disappointment at the National Energy Regulator of South Africa’s (Nersa) decision to only grant it a 5.23% tariff hike instead of the 19.9% increase it had asked for.
“Eskom notes and is disappointed with the decision by the National Energy Regulator of South Africa on Eskom’s allowed revenue of R190.348 billion for the 2018/19 financial year. This translates to a percentage price increase of 5.23%,” said the power utility following the regulator’s announcement on Friday.
The power utility had asked Nersa for a 19.9% average increase in electricity tariffs for 2018/19 that will result in total allowable revenue of R219.5 billion.
The regulator made the announcement at a media briefing at the regulator’s offices in Tshwane on Friday.
Nersa initially planned to make the decision public on 7 December. The decision was then meant to be made public on Wednesday.
Eskom said it made its application in accordance with the Multi-Year Price Determination (MYPD) methodology, which allows Eskom to submit any changes permitted by the methodology. This corresponded to a revised average standard price increase of 18.9%.
“Eskom will await the regulator’s reasons for decision document for the 2018/19 allowed revenue in terms of the MYPD methodology. This will provide insight into how this allowed revenue decision was made. The reasons for decision document will enable Eskom to make an assessment on the impact to the business and then make a decision on the way forward,” said the power utility.
The regulator’s decision of a 5.23% tariff increase will give Eskom allowable revenue of R190.348 billion.
Nersa said it had followed due regulatory processes in considering Eskom’s revenue application for 2018/19.
On 13 September 2017, Eskom’s application was published on Nersa’s website, along with an invitation to stakeholders to submit written comments.
A total of 23,000 written comments were received from stakeholders, consisting of comments from private individuals, small users, intensive energy users, non-governmental organisations and environmental activists, as well as local government and other stakeholders.
The energy regulator conducted public hearings in eight of the nine provinces of South Africa from 30 October to 22 November 2017.
The public hearings afforded interested and affected stakeholders the opportunity to submit their views, facts and evidence. A total of 96 oral presentations were made.