By Lehlohonolo Lehana.
The National Energy Regulator of SA (Nersa) is expected to announce a “draft” decision on Eskom’s revenue application for the next two years at an energy regulator meeting.
The regulator has published its meeting schedule for the week ahead, noting that the decision for Eskom’s fifth Multi-Year Price Determination (MYPD5) revenue application for the 2023/24 and 2024/25 financial years will be announced on Wednesday, 14 December.
Also on the agenda is Nersa’s decision on Eskom’s fourth Multi-Year Price Determination (MYPD4) Regulatory Clearing Account (RCA) application for the 2020/21 financial year.
The decision on Eskom’s application was initially planned for early November, but it was delayed to later in the month. At that meeting, held on 29 November, the decision was removed from the agenda and pushed back even further to December.
A member of Nersa’s electricity subcommittee, Nhlanhla Gumede, submitted at the beginning of the meeting that the three items regarding Eskom’s multiyear price determination revenue application be withdrawn.
“It has unfortunately been identified that gremlins slipped into the calculations, and we need to make sure that, as a regulator, when we make decisions, we make a decision based on correct numbers,” Gumede said at the time.
The regulator members were expected to rule on whether Eskom is entitled to recover more revenue from electricity users next year and, if not, how big an increase it will allow.
The members were also expected to announce the tariff increase in the subsequent year, for which Eskom applied for a further 10% increase.
The national power utility applies every year to the regulator for massive price increases, only to be limited to single-digit hikes. Eskom has argued that its tariffs are not reflective of the cost to produce electricity, and Nersa’s limitations are creating a ‘backlog’ of hikes – a bubble that is about to burst.
Eskom has applied for a 32% tariff hike in 2023, which, when added to court-ordered backlogs, could see prices climb by over 38%.
This proposed tariff hike has been rejected by major metropolitan municipalities, civil action groups and even Nersa insiders, who said that consumers cannot afford the hike and should not be the ones to suffer for Eskom’s inefficiencies.