The public have until next week to have their say on plans by Eskom to increase electricity tariffs by over 30%.
The National Energy Regulator (Nersa) has asked the public to comment on Eskom’s application to increase tariffs by 38.1% for 2023/24 and 5.12% for 2024/25 as part of its Multi-Year Price Determination (MYPD) period.
Eskom submitted its MYPD5 application on June 2, 2021 and requested to be allowed an amount of R335bn and R365bn for financial years 2023/24 and 2024/25 respectively.
The main drivers of the application are cited as regulatory asset base (RAB); primary energy; independent power producers (IPPs); operating costs; and depreciation.
“The revenues and tariff decisions that will be determined by NERSA for the 2023/24 year, will be implemented from 1 April 2023 for non-municipal customers and from 1 July 2023 for municipal customers. The revenue/tariff determination will be completed by November 7, 2022,” Nersa said in its consultation paper.
“This application is made based on the MYPD4 methodology which Nersa also wants the public to comment on.
“The methodology is founded on three conventional regulatory principles that determine whether utilities will be provided with an opportunity, not an assurance, to recover their costs and earn a return on their capital investments – costs and investments must be: ‘prudent’; ‘used and useful’; and ‘known and measurable’”.
Nersa explained that another area that needed to be considered was the averaging of generation costs across the entire Eskom fleet as it ‘shields’ inefficiencies, procurement malfeasance and debt allocation from scrutiny.
Public comment organisation Dear South Africa encouraged the public to have their say.
“Nersa has previously approved tariff increases lower than what Eskom had asked for. Earlier this year, Nersa approved a 9.61% instead of 20.5%. Nersa spokesperson Charles Hlebela said they approved the previous lower increase after more than 60 000 citizens raised affordability concerns. Public participation most certainly has an impact on these decisions,” Dear South Africa chairman, Rob Hutchinson said.
Civic organisation STOP City of Cape Town’s Sandra Dickson added public participation was the only avenue left to question and stop “irrational” government decisions which were not opposed by elected politicians.
“The silence and lack of will of our politicians to serve the electorate by effectively stopping Eskom from these increases is simply shocking.
“It is therefore now more important than ever for the public to have their say to oppose this 38% tariff increase by Eskom. The results from a public participation process like this, can be used as evidence in a court of law in an effort to oppose Eskom. The public simply has no other recourse.”
The consultation paper can be found atwww.nersa.org.za/wp content/uploads/2022/07/CONSULTATION-PAPER-MYPD5.pdf
Written comments can forwarded to mypd@nersa.org.za; hand-delivered to Kulawula House, 526 Madiba Street, Arcadia, Pretoria, or posted to PO Box 40343, Arcadia, 0083, Pretoria, South Africa.
Alternatively comments can also be made at made at dearsouthafrica.co.za/eskom-38-increase/
The closing date for comments is September 8, at 4pm.
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