HomeIndustry SectorsFinance and PolicyEskom provides update on tariff application

Eskom provides update on tariff application

16 July 2012 – Eskom says that it has yet to finalise the application it will submit to the National Energy Regulator of SA (Nersa) for tariff increases for the period from 1st of April 2013, but expects to do so within the next few weeks, once input has been received from organised local government and the National Treasury.

Eskom has submitted its proposed multi-year price determination (MYPD) 3 application to the SA Local Government Association and the National Treasury for comment, in compliance with the requirements of the Municipal Financial Management Act (MFMA). The Act requires that organised local government and the National Treasury must be given 40 days in which to comment on the application, and that their inputs be taken into account in the final application which is submitted to Nersa.

Though there have been media reports on the tariff application, Eskom emphasises that it awaits comment as a part of the consultation process and that a final application has yet to be submitted.

Electricity tariffs are decided by Nersa in multi-year price determinations, with the current determination (MYPD 2) covering the period up to 31st March 2013. Though previous determinations have been for three years, Eskom is proposing a five-year determination for MYPD 3, to ensure a predictable, longer-term price path for customers, investors and the country.

Eskom says it will take heed of the need for economic growth and job creation in South Africa, but will seek to balance this with the country’s need for a financially viable and sustainable electricity industry. Electricity tariffs are not yet at cost reflective levels. They must continue to migrate towards those levels so that they can cover the full cost of producing electricity, as well as support the investment in infrastructure needed to ensure a secure supply of electricity for South Africa.

Once the application is submitted to Nersa it will be publicly available and an extensive process that includes public participation through public hearings and consultation precedes the regulator’s decision.

“The regulator has an extensive public participation process and we are committed to extensive and transparent public engagement on electricity prices. We encourage the public to participate in the process and engage with our application once we have submitted it to Nersa,” Eskom chief executive Brian Dames says.