The National Energy Regulator of South Africa (NERSA) on Thursday granted Eskom an 18.65% tariff increase.
Eskom had requested a 32% tariff hike.
Announcing its decision, NERSA said the 18.65% increase was based on its approved tariff of 146.48c/kWh in the 2022/23 financial year.
“The NERSA-approved revenue is R334bn for the 2024/25 financial year, which translates to a tariff of 195.95c/kWh, resulting in a 12.74% increase based on the tariff of 173.80c/kWh NERSA approved tariff for the 2023/24 financial year.”
The decision, said NERSA, was “based on the information at its disposal and the analysis of Eskom’s fifth Multi-Year Price Determination (MYPD5) revenue application for the 2023/24 and 2024/5 financial years”.
NERSA spokesperson, Charles Hlebela, in a statement said: “The allowable revenues… must be recovered from both Eskom standard and non-standard tariff customers (Negotiated Pricing Agreements and international customers) based on the previously approved tariff principles and structures using the Eskom Retail Tariff Structural Adjustment (ERTSA) Methodology, as approved by NERSA.”
He said Eskom’s application for the 2023/24 financial year’s revenue was R351billion, including Regulatory Clearing Accounts (RCAs) and court orders.
“NERSA’s approved allowable revenue is R318 billion after considering adjustments for inefficiencies and prudency reviews.
“For the 2024/25 financial year, Eskom applied for revenue of R381 billion, including RCAs and government injection, as per the court order. The NERSA-approved revenue is R352 billion after considering adjustments for inefficiencies and factoring the RCA as per the Energy Regulator decision of 14 December 2022,” reads the statement.
NERSA approved a total revenue of R300 billion for the 2023/24 financial year, which translates to a tariff of 173.80c/kWh.
“The NERSA-approved revenue is R334 billion for the 2024/25 financial year, which translates to a tariff of 195.95c/kWh, resulting in a 12.74% increase based on the tariff of 173.80c/kWh NERSA approved tariff for the 2023/24 financial year,” the regulator said.
The Energy Regulator said it would consider the ERTSA for the 2023/24 financial year following the submission of an application by Eskom.
It said it would subject all customer costs to further extensive prudency reviews, efficiency tests and performance thresholds.
The Energy Regulator said it made its decisions after conducting the due regulatory process, which included publishing Eskom’s revenue application and inviting written comments from stakeholders. It also conducted public hearings to solicit comments from interested and affected stakeholders.
“As a result, NERSA received approximately 2000 written comments from stakeholders, who raised concerns about affordability.
“It is important to note that Eskom’s revenue application for the 2023/24 and 2024/25 financial years was considered against various challenges that are affecting the South African economy. Accordingly, the Energy Regulator’s decision provides a balance between the sustainability of Eskom and the economic well-being of the consumers and the economy,” it said.