By Lehlohonolo Lehana.
The National Ernergy Regulator of South Africa (Nersa) has published Eskom’s multi-year revenue application up until 2028, with public submissions open until 1 November.
If granted, this would translate to a tariff increase for direct Eskom customers of 36.15% on April 1 next year, and a 43.55% hike in municipal tariffs from July 1.
The documents have been published on the Nersa website following an assessment of its compliance with the methodology and approval to do so during a special Electricity Subcommittee meeting held on September 23.
The three-year application also includes total revenue requests of R495-billion and R537-billion for the 2026/27 and 2027/28 financial years, with associated hikes of 11.81% and 9.1% for the two outer years should the 36.15% increase have been approved in the first year.
The application includes Regulatory Clearing Account (RCA) determinations to allow Eskom to claw-back revenue foregone in previous tariff periods and court outcomes, including a ruling allowing Eskom to recover residual amounts arising from the illegal removal of R69-billion from its asset base during the MYPD4 horizon.
The MYPD6 application is accompanied by separated submission documents showing the specific allowable revenue requests of Eskom Generation, Eskom Distribution and the National Transmission Company of South Africa (NTCSA), which began operating as a wholly-owned Eskom Holdings subsidiary with its own board, on July 1.
The NTCSA has applied for allowable revenue of R101-billion, R115-billion and R155-billion for the three financial years covered by the MYPD6.
Eskom Generation is applying for R292-billion, R324-billion and R322-billion over the horizon, which includes revenue to continue operating and maintaining units at Camden, Hendrina, Grootvlei, Arnot and Kriel that would have had units shutting down during this period, but where permission has been granted to allow for ongoing operations until 2030.
Eskom Distribution, which is expected to begin operating as a separate subsidiary in the coming year, has applied for allowable revenue of R53-billion, R56-billion and R59-billion for the period covered by the MYPD6.
The submission also highlights the ongoing need for tariff restructuring, following Nersa’s refusal to approve restructuring requests in 2020 and 2022, but states that restructuring proposals would be made in a separate application to the regulator.
Eskom argues that restructuring is required to align tariff rates with divisional costs, reflect the evolving energy industry, and ensure revenue recovery.