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Nersa to decide on Eskom 25.3% tariff increase

Public will have its say.



Energy regulator Nersa will only take a final decision on Eskom’s application for a 25.3% tariff increase for the current financial year at the end of June.


That means that whatever further increase is granted – over and above the earlier granted 12.69% increase – may only be implemented for Eskom’s direct clients later in July and for municipal customers in September.



For the time being the 12.69% increase stands as implemented on April 1 and municipal tariff increases based on that will be implemented on July 1 after being approved by Nersa.



Nersa on Wednesday set out the way it will deal with Eskom’s application for a ‘selective re-opener’ of the tariff determination for 2015/16, 2016/17 and 2017/18 to provide for diesel purchases and buying power from independent power producers.
 Eskom’s application was published on its website today (Wednesday), after some confidential sections were removed.



The public will have 30 days to make submissions* until June 15. Public hearings will be held for two days around June 24 and Nersa hopes to take a final tariff determination on June 29.
Thereafter Eskom will have to translate the average increase into detailed tariffs that Nersa has to approve before it can be implemented. Municipalities will have to translate it into their own tariff systems and only after these tariffs have been approved by Nersa, will municipal tariff increases be approved.



Regulator member for electricity Thembani Bukula said it is not bending the rules for Eskom. He said the prescribed methodology does not allow for a partial re-opener of the tariff increase. The regulator will consider Eskom’s application as it stands and it only focuses on two cost items, namely diesel and power purchases.
 He said stakeholders may table other issues during the consultation and that will also be considered.



Bukula denied that Nersa’s earlier decision to grant Eskom only 8% annual tariff increases for the five years ending March 31 2015 instead of the 16% it applied for was the cause of Eskom’s problems.
 He said the decision was based on information Eskom supplied, including the completion dates of Medupi and Kusile and plant availability of 80%. This information proved to be wrong and therefore the allocated revenue is not enough.
 Bukula said Eskom’s installed generation capacity is 43 219MW. If 80% of that was available, as Eskom indicated in its initial application for 16% it would be sufficient to keep the lights on, even without the use of power from independent power producers and renewable energy.

He said Nersa has found out that of 40 units that were maintained over a period, 20 broke down again within 30 days. He said it will take time to tell whether the quality of Eskom’s maintenance has improved.

*Written comments can be forwarded to mypd3@nersa.org.za or hand-delivered to Kulawula House, 526 Madiba Street, Arcadia, Pretoria or posted to PO Box 40343, Arcadia, 0083, Pretoria, South Africa. The closing date for written comments is June 15 2015 at 16H00.

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