Electricity prices to increase 12.69% in 2015, says Nersa

3rd October 2014

By: Natalie Greve

Creamer Media Contributing Editor Online

  

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The National Energy Regulator of South Africa (Nersa) has approved the implementation plan of the Regulatory Clearing Account (RCA) balance of R7.8-billion for energy utility Eskom, outlining on Friday that the implementation of the second multiyear price determination 2 (MYPD2) RCA in 2015/16 will result in an average tariff increase of 12.69%.

This was an increase from the original 8% electricity price hike for standard customer tariffs approved in the MYPD3 decision of February 2013.

The regulator said in a statement that the RCA balance would be a one-off recovery from the standard tariff customers, as well as other Eskom customer categories and would only be implemented in the 2015/16 financial year.

In August 2013, Eskom submitted its RCA assessment for the three years of the MYPD2 for consideration by Nersa, applying for a cumulative RCA balance of R18.4-billion.

Nersa had already determined that Eskom was entitled to recover additional revenue for the MYPD2 period, covering the three-year horizon from April 1, 2010, to March 31, 2013.

Engineering News Online reported last month that Cabinet had, meanwhile, approved a multidimensional support package for Eskom, which included a further allocation of funds.

The statement said that the “equity injection” would be funded through “leveraging nonstrategic government assets”.

The equity injection was seen as a way of helping to relieve the impact on electricity consumers of possible higher tariffs, which government said remained “the key mechanism that will provide the electricity supply industry with a sustainable solution”.

Details of the equity injection would be revealed as part of Finance Minister Nhlanhla Nene’s Medium-Term Budget Policy Statement on October 22.

National Treasury had also indicated that government would support Eskom’s application to Nersa for “tariff adjustments in line with the regulatory process”.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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