By Lehlohonolo Lehana.
Nersa has missed its own deadline to finalise a new method for determining the tariffs Eskom, municipalities, and all other electricity licensed suppliers.
According to Nhlanhla Gumede, regulator member for electricity and chair of the Nersa electricity sub-committee, said a meeting of the energy regulator on Thursday (29 September) noted that it will only be finalised early next year, due to delays in the appointment of technical specialists and drafters.
Gumede said the initial June deadline was extended to 30 September, but that these appointments, among other things, delayed the process.
This after Eskom had to go to court to prevent premature implementation of the proposed new methodology.
The saga began last year when Nersa rejected Eskom’s tariff application for the 2022/23 – 2024/25 period, on the basis that it was prepared using the 2016 methodology, which Nersa held had expired.
Eskom argued that the methodology remains valid until replaced by another lawfully developed and accepted methodology.
The court ruled in Eskom’s favour and ordered Nersa to determine the tariffs for the first of the three years by 25 February, following the existing (2016) methodology.
At a public workshop Nersa held about the new methodology, Gumede had said there is no time to waste in finalising the new methodology as the current one is no longer appropriate.
Eskom meanwhile has confirmed that it will be applying for a 32% tariff hike for implementation on April 1, 2023. The State-owned utility is also applying for a 9.74% increase for its subsequent financial year.
The addendum also outlines a large increase in the depreciation allowance, which accounts for 10.67% of the 32.02% being sought.
Eskom argues that the depreciation adjustment arises from an “incorrect” regulatory asset base (RAB) valuation by the National Energy Regulator of South Africa (Nersa) in a 2021 tariff decision, whereby the regulator reduced Eskom’s RAB from over R1.2-trillion to about R550-billion.
Eskom subsequently took the RAB aspect of the decision on legal review and a ruling could be made prior to the next Nersa tariff determination.