Nersa releases reasons for 9.4% Eskom tariff hike

The National Energy Regulator of South Africa (Nersa) on Tuesday released a much-anticipated report detailing the reasons for a 9.4% Eskom tariff hike.

In a summary of its decision Nersa said that the the Regulatory Clearing Account (RCA) balance of R11.241bn would be recoverable from standard tariff customers, local Special Pricing Agreements (SPAs) and international customers in the financial year 2016/17.

“The amount of R10.257bn would be recoverable from standard tariff customers for the 2016/17 financial year only; the average tariff for standard tariff customers 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 the 2016/17 financial year only; and Eskom must submit a new Multi Year Price Determination (MYPD) application, within three months, based on revised assumptions and forecasts that reflect the recent circumstances’

Head of energy regulation at Nersa Thembani Bukula told Parliament’s Portfolio Committee on Energy on March 8 that the regulator had to perform a delicate balancing act, weighing up the various needs of electricity consumers and providers in making its decision.

Nersa was called before the portfolio committee to explain the rationale behind the decision to grant Eskom an additional R11.2bn in revenue for 2016/17 – 50% of the amount the power utility had requested.

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Responding to questions from MPs who accused Nersa of not taking public interest into account, Bukula said the regulator was required to balance the interest of investors, Eskom and customers who consumed electricity from Eskom.

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