Eskom has been granted an 8%/year electricity tariff hike for the next five years, significantly below the 16% it was seeking, the National Energy Regulator of SA (Nersa) said on Thursday.
The power utility quickly spoke out against Nersa’s decision, saying the the approved tariff hike will present “a challenge” for the company. “We will be studying the decision in detail to understand its consequences and impact for Eskom,” spokesman Hillary Joffe said “We have noted the decision and it will present a challenge for Eskom.”
If Nersa had granted Eskom’s application for a 16%/year increase, it would have more than doubled the current price, taking it from 61c/kWh in 2012/13, to 128c/kWh in 2017/18.
Nersa said its decision was based on facts, and that a detailed analysis had been done.
“The decision of the energy regulator is based on facts,” Nersa chair Cecilia Khuzwayo told reporters in Pretoria. “The third multi-year price determination [MYPD3] will be 8% over the next five years.”
This meant the total revenue approved for the five-year period amounted to R906 553.
The current multi-price determination, MYPD2, ends on 31 March 2013. Both MYPD1 and MYPD2 had spanned a period of three years.
Khuzwayo said a detailed analysis was done on Eskom’s application. “Eskom must ensure that alternative tariffs, other than time-of-use tariffs are available to municipalities with a predominantly residential load mix.”
Khuzwayo said it was important to note that the MYPD3 application was made with the backdrop of “continuing global economic recession”. She said Nersa had followed due processes and held public discussions on the tariffs.
“Approximately 200 written stakeholder comments were received. A total of 162 oral representations were made during public hearings conducted in nine provinces,” she said.
“Our challenge … has been and still remains regulating the energy sector in the manner that balances the interests of energy producers on one hand and consumers on the other hand.”
The parastatal has previously said it needs the increase to cover the costs of supplying the electricity needed to power South Africa and invest in infrastructure.
The proposed increase was met with criticism from political parties, unions, civil society, businesses, and South Africans in general.
Thembani Buluka, chairman of a Nersa electricity subcommittee, said that it had not spoken to Eskom about its decision. “The increase we have given is sufficient for Eskom.”
Buluka said Eskom was allowed to appeal against Nersa’s decision. — Sapa
