NERSA approves tariff hike for Eskom
A tariff hike approved for Eskom for the next three years.
MYPD3 RCA Year 5 (2017/18) Decision:
- 2017/2018 – R3,869bn
MYPD4 (2019/20 to 2021/22) Decision:
- 2019/2020 – R206,380bn and this will result in an average of 9.41% price increase
- 2020/2021 – R221,843bn and this will result in an average of 8.10% price increase
- 2021/2022 – R233,078bn and this will result in an average of 5.22% price increase
How will the revenues be recovered
The RCA balance of R3,869bn will be recoverable from the standard tariff customers, local Special Pricing Arrangement (SAPs) customers and international customers.
The MYPD4 allowed revenues must be recovered from both Eskom standard and non-standard tariff customers (Negotiated Pricing Agreements and International Customers) based on the previously approved tariff principles and structures using the Eskom Retail Tariff Structural Adjustment (ERTSA) Methodology as approved by NERSA.
Governance failures occurred in Eskom
NERSA acknowledged that Eskom conceded that certain governance failures occurred in Eskom and the extent of the governance failures or amounts associated therewith had not been fully quantified.
The Energy Regulator may initiate its own investigation into the governance failures in Eskom and may effect adjustments to Eskom’s revenue based on the relevant outcome of its investigation.
NERSA’s proposals to improve Eskom’s operational efficiencies
Eskom should:
- Reduce costs and provide a plan within six months on cost cutting;
- Reduce unplanned outages and trips;
- Reduce water usage costs and develop a maintenance plan;
- Improve the Energy Availability Factor (EAF) by reducing the unplanned capacity loss factor (UCLF) and effectively executing planned outages;
- Reduce loadshedding.
