This comes after the National Energy Regulator of South Africa (Nersa) determined that Eskom under-recovered costs amounting to nearly R8 billion in the previous tariff period and approved the power utility’s recovery of the amount.
However, it was unclear what the tariff increase would amount to, as the regulator would still decide on the implementation of the decision.
“There will be a tariff adjustment to the 8 percent that has already been approved; however this additional percentage has yet to be determined,” the regulator’s spokesperson Charles Hlebela said.
“The National Energy Regulator of South Africa announced… that it has approved the Regulatory Clearing Account [RCA] balance of R7.8 billion for Eskom Holdings SOC Limited,” the regulator said earlier in statement.
“The approved RCA balance is for the second multi-year price determination (MYPD2) control period, 2010 to 2013, and will be implemented in the 2015/16 financial year.”
The RCA is a regulatory mechanism that allows Eskom to adjust for over- or under-recovery of revenue, as the initial price determinations were based predominantly on forecasts.
The regulator would draft an implementation plan that would determine exactly how Eskom would recover the money.
In a separate statement, Eskom said it welcomed the decision regarding a balance in its favour, despite only being sanctioned to recover less than half of the R18.3 billion that it had initially applied for from consumers.
“Eskom cannot determine what the impact will be on specific customer categories as the regulator will still decide on how this balance will be liquidated,” said the statement.
Eskom has faced significant cash-flow problems contributing to its battle to keep the country’s lights on.
During the presentation of Eskom’s 2014 integrated results, the power utility expressed concerns about its financial situation revealing plans to address it.
“Eskom’s financial sustainability is under pressure but we have investigated alternative funding, including possible equity and quasi-equity, in response,” Eskom’s finance director Tsholofelo Molefe said.
“We have applied to Nersa for the RCA adjustment, and we have launched a business productivity programme to reduce cost, increase productivity and enhance efficiencies.”
This week, during the joint energy and public enterprises committee meeting, Eskom outlined its bleak financial situation including under-investment, growing municipal debt, ageing infrastructure and continued risk of load shedding.
