Nersa held public hearings into Eskom's MYPD5 application in September
Photo by: Creamer Media
The Energy Regulator has postponed deciding on Eskom’s tariffs for 2023/24 and 2024/25 after the Electricity Subcommittee (ELS) of the National Energy Regulator of South Africa (Nersa) requested more time to finalise its recommendation – this only ten days out from a looming December 24 deadline for the regulator to finalise its decision as stipulated in an order made earlier in the year by the High Court.
Eskom’s fifth Multi-Year Price Determination (MYPD5) revenue application, if fully approved, would translate into a 32% hike in its standard tariff on April 1, 2023, followed by a 9.74% increase in 2024/25.
The increase requested by Eskom is premised on allowable revenue of R335-billion, before any possible regulatory clearing account (RCA) adjustments and before catering for R15-billion arising from a settlement reached after the Supreme Court of Appeal ordered that the remaining portion of a R69-billion government equity injection, which was found to have been deducted incorrectly from Eskom’s MYPD4 revenue, be recouped.
In terms of the settlement, the outstanding R59-billion would be recovered during the financial years from 2024 to 2027.
The Energy Regulator was scheduled to make an MYPD5 determination on Wednesday, but following a protracted workshop held to consider the application a total of 14 issues of concern were raised by regulatory members.
As a result, the ELS requested the Energy Regulator, Nersa’s highest decision-making body, to provide it with more time to finalise its recommendation.
While the Christmas Eve court-ordered deadline was highlighted, no firm timeframe was provided for when a final decision would be made.
Instead, officials were instructed to finalise a “project plan” by the close of business on December 14 for resolving the outstanding matters.
The Energy Regulator also postponed approving Eskom’s R10-billion RCA application for the 2020/21 financial year, which formed part of the MYPD4 revenue cycle.
During a meeting on November 29, the Energy Regulator referred the RCA decision back to the ELS for reconsideration, arguing that several questions about the application remained unanswered.
These issues had not been resolved satisfactorily by December 14 and the ELS, thus, also requested more time.
Approval was provided, however, on an implementation plan for RCAs arising from the 2019/20 and 2020/21 financial years, which were approved by the Energy Regulator on December 6, 2021, and November 8, 2022, respectively.
Collectively the RCAs amount to R3.46-billion and the Energy Regulator approved that these would be liquidated over a three-year period, beginning in 2024/25.