Hefty electricity tariff increase by Eskom
Eskom will be raising electricity tariffs by 25.3% in the next few months.
The National Energy Regulator (NERSA) announced it has received Eskom’s application for the selective reopening of the Third Multi-Year Price Determination (MYPD3) decision for the 2015/16 to 2017/18 period.
Eskom’s selective reopener application requires cost recovery of R32.9-billion for Open-Cycle Gas Turbines (OCGTs) and R19.9-b for the Short-Term Power Purchase Programme (STPPP).
According to Eskom’s application, the selective reopener will result in a total price increase of 25.3% for 2015/16.
This will consist of the 12.69% approved by the Energy Regulator, the 10.10% selective reopener for OCGTs, STPPP and a 2.51% increase in the environmental levy by 2c per kilowatt per hour (kWh).
Nersa is considering the application, taking into consideration the urgent need to stabilise the electricity network to avoid a possible total blackout and Eskom’s operational and financial challenges.
Due to the financial challenges, the submitted reopener will accommodate additional STPPPs and further utilisation of Eskom’s OCGTs to contribute towards addressing the supply and demand balance.
“The tariff adjustment remains the key mechanism to provide the electricity supply industry with a sustainable electricity supply solution, and will provide Eskom with the revenue and cash flows it needs to complete the current programme of building power stations, and to repay debt and the interest thereon,” reads a statement issued by Eskom’s media desk.
“Although the support package recently announced by government will ease Eskom’s liquidity pressures in the short term, the issue of long-term financial sustainability must still be adequately addressed.”
They add the Kusile Power Station project is making good progress and the synchronisation of its first unit is expected at the end of the first half of 2017.
Construction progress in critical areas of Medupi and Kusile was hindered by both protected and unprotected industrial action during July, with labour attendance of 40% to 70% during the period.
The workforce has since returned to site, and action has been taken against civil contractors whose workers caused disruptions.
