Eskom Hld SOC Ltd @Eskom_SA stated, “Nersa has announced it would not grant Eskom the 9.58 percent tariff increase it had requested in the selective re-opener for the Multi Year Price Determination 3 ( MYPD3).”
Nersa’s chairperson Jacob Modise said their mandate was to regulate electricity and gas, and the challenge remained the regulation of the energy that balances the need of consumers and producers, which was never an easy task.
He mentioned the number of complaints Nersa received during the public hearings on the electricity tariff increase, and stated that more that 225 written responses and 30 presentations were made from small users and intensive users alike. Modise said, “At the public hearings, the key issues were high prices will result in job losses and capacity in the economy.”
At the hearings, Eskom’s acting CEO Brian Molefe told Nersa that Eskom needed the extra money to keep Open Cycle Gas Turbines (OCGT) running and that without it, Molefe claimed that load shedding would be even more prevalent than it is now. He said, “Eskom needs R11 billion per year to power OCGT, R5.8bn funding per year for short-term contracts with independent power producers, and further funds for an increased environmental levy.
However, Modise said that some of the OCGT commission dates have lapsed, and that no new information has been been given by Eskom on new commissions. He said, “Based on available information and analysis performed, the energy regulator has decided not to approve Eskom’s application for the selective re-opener of the MYPD3 application for OCGT and short-term power purchase programmes, and the impact of the environmental levy.”
Modise said Eskom could submit a new application for the period 1 April 2016 to 31 March 2019 with indicative projections for the period 1 April 2019 to 31 March 2021. He added that the energy regulator did not consider the proposed increase to the environmental levy as it was not gazetted, and Eskom withdrew the application during the public hearings.
“Any additional price increases for the 2015/16 financial year can not be considered as Section 28.6 of the Municipal Finance Management Act states that tariffs cannot be increased during a financial year. The application does not align with the credible long-term planning and certainty that MYPD3 sets out to achieve. Indeed, it works against such,” he said.
