Battle scarred electricity consumers can sigh a sigh of relief – for now.
Last Wednesday the National Energy Regulator of South Africa (Nersa) did not approve Eskom’s application for a 25.3 per cent tariff hike for the 2015-16 financial year and instead instituted a fast-track public consultation process, which would culminate in a determination by June 29 of this year.
Eskom had applied for a selective reopening of the final three years of the third multi-year price determination (MYPD3) decision, which began on 1 April 2013 and will continue until 31 March 2018. In its application Eskom sought approval to increase its 2015-16 tariffs to 25.3 per cent inclusive of the 12.69 per cent already granted in the current financial year.
The Regulator member for electricity, Thembani Bukula, said it is not bending the rules for Eskom. He stated the prescribed methodology does not allow for a partial re-opener of the tariff increase. The regulator will only consider Eskom’s application as it stands and it only focuses on two cost items, namely diesel and power purchases. He said stakeholders may table other issues during the consultation and that will also be considered. It is important that Nersa sticks to the prescribed methodology and not do Eskom favours.
Nersa is bound by its mandate to only allow the revenue an efficient operator needs. As the Eskom crisis deepened in recent months, government has repeatedly stated its support for higher tariffs. Going forward, Nersa will have its job cut out to maintain its independence and balance the needs of Eskom, its shareholders and consumers.
Gordon Mackay, the DA’s Shadow Minister for Energy has called the move “a victory for the DA and consumers.”
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