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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”.