Eskom claims R762-billion over the next three years

October 24th, 2018, Published in Articles: EE Publishers, Articles: Energize

The National Energy Regulator (Nersa) has received Eskom’s Third Multi-Year Price Determination (MYPD3) Regulatory Clearing Account (RCA) Year 5 (2017/18) application, totalling R21,6-billion, as well as the Fourth Multi-Year Price Determination (MYPD4) revenue application, totalling R762-billion (R219-billion, R252-billion and R291-billion for 2019/20, 2020/21 and 2021/22 financial years, respectively).

In February 2013, Nersa approved a total of R906,5-billion for the period between 1 April 2013 and 31 March 2018. This approval resulted in an annual average tariff increase of 8% and took the average electricity price to 89,13 c/kWh.

This new application, if approved, would require an additional increase over and above the 5,3% which has already been approved and implemented.

Upon receipt of the applications, Nersa conducted an analysis for compliance with both the Minimum Information Requirements for Tariff Applications (MIRTA), as well as the Multi-Year Price Determination (MYPD) Methodology. On 2 October 2018, it was found that the application contains the minimum information and complies with both MIRTA and MYPD, as the relevant documents were submitted. On 15 October 2018, NERSA considered and approved the confidential treatment of certain information contained in both applications. Based on this, NERSA may commence with its evaluation of the two applications.

The RCA is a correction mechanism of the MYPD, where excess or inadequate returns are managed. It consists of the variance between the actuals for the full financial year and what was allowed in the MYPD decision of the Energy Regulator. If it is found that the variance is reasonable and justified, Eskom is allowed to recover the requested revenue. By design, the RCA is backward looking and deals with actuals and facts, while the MYPD application is forward looking and deals with forecasts and estimates.

The Energy Regulator will assess Eskom’s applications following due regulatory processes. The indicative timeline for the decision-making process is provided in Table 1.

Table 1: Indicative timeline for the decision-making process.

 

Table 2: Proposed public hearing dates and venues.

*The dates of the public hearings might be extended/reviewed depending on the number of presenters that register. Venues will be communicated in due course.

Written comments can be forwarded to mypd@nersa.org.za, hand-delivered to 526 Madiba Street, Arcadia, Pretoria or posted to PO Box 40343, Arcadia, 0083, Pretoria. The closing date for written comments on both the MYPD3 RCA Year 5 (2017/18) and MYPD4 applications is 16h00 on 30 November 2018. Stakeholders are requested to submit separate comments for each application.

Members of the public and stakeholders who wish to attend or present their views at any of the public hearings must submit their request to publichearings@nersa.org.za  by 15h30 on 4 January 2019. Stakeholders are requested to make separate oral representations on the MYPD3 RCA Year 5 (2017/18) application and the MYPD4 revenue application at the public hearings. Eskom’s MYPD3 Year 5 (2017/18) RCA application and MYPD4 revenue application are available on the NERSA website at www.nersa.org.za

Contact Charles Hlebela, Nersa, Tel 012 401-4600, charles.hlebela@nersa.org.za