Eskom’s 9.4% tariff increase approved

The Energy regulator Nersa granted Eskom a further R11.2 billion which equates to a 9.4% tariff increase, almost half of what they asked for.

The increase will be set into effect for customers on April 1 2016. Nersa also instructed Eskom to submit a new multi-year tariff application (MYPD4) within three months, based on revised assumptions and forecasts that reflect the recent circumstances.

The big variance between what Eskom applied for and what it got, is situated in Nersa’s assessment of Eskom’s revenue and its expenditure on primary energy.

Eskom applied for R11.7 billion to compensate for lower than expected revenue, but Nersa only granted it R6.1 billion. “The larger part of this difference is because Eskom did not disaggregate the Special Pricing Agreements and International Sales when allocating the approved MYPD3 revenue to different customers”, Nersa said in a statement.

Nersa only compensated Eskom by the amount it would have cost to generate the equivalent volumes of electricity by its coal-fired power stations.

The increase will take effect on April 1 for direct Eskom customers and on 1 July for municipal customers.

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