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NERSA gives Eskom processing timeline for 25% tariff hike proposal

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NERSA welcomes public comment on Eskom’s MYPD3 selective reopener application until 15 June 2015

On Wednesday, the National Energy Regulator of South Africa (NERSA) determined the timelines for processing Eskom’s application for the selective reopening of the Third Multi-Year Price Determination (MYPD3) decision for the 2015/16 to 2017/18 period.

This follows the power utility’s submission to the regulator of its selective reopener application for consideration on Thursday, 30 April 2015.

According to NERSA, the parastatal’s selective reopener application requires a cost recovery of ZAR32.9 billion for Open-Cycle Gas Turbines (OCGTs) and ZAR19.9 billion for the Short-term Power Purchase Programme (STPPP).

The STPPP involves Eskom contracting private generating capacity on a short-term basis.

According to Eskom’s application, the selective reopener will result in a total price increase of 25.30% for 2015/16. This will consist of the 12.69% approved by the energy regulator, the 10.10% selective reopener for OCGTs and STPPP, and a 2.51% increase in the environmental levy by ZAR0.02c per kWh, NERSA explained in a statement.

The table below outlines the timelines for processing Eskom’s MYPD3 selective reopener application:

13 May 2015 Publication of Eskom’s MYPD3 selective reopener application on NERSA website for stakeholder comments
15 June 2015 Closing date for stakeholder comments on Eskom’s MYPD3 selective reopener application
23 to 24 June 2015 (2 days) Public Hearing on Eskom’s MYPD3 selective reopener application
29 June 2015 Energy Regulator decision on Eskom’s MYPD3 selective reopener application

Submission process

Eskom submitted a multi-year price determination methodology to NERSA for a third time in October 2012 to determine an increase in electricity tariffs.

Eskom stated that it has “initiated a selective reopener of the MYPD3 application from the 2015/16 financial year onwards that proposes an adjustment in the tariffs. This is due to costs incurred securing further short-term power purchases and increased use of open cycle gas turbines.”

In a company statement Eskom explained: “In terms of the Municipal Finance Management Act, Eskom is required to first consult with the National Treasury and the South African Local Government Association prior to submitting to NERSA for consideration. Eskom will consider these comments before submitting to NERSA. NERSA will then follow their normal governance processes before making a decision.”

Public participation

NERSA would like to encourage stakeholders and the public to actively participate in this process by submitting written comments and attending or making oral representation at the public hearing to be held from 23 to 24 June 2015, NERSA said in a statement.

The closing date for written comments is 15 June 2015 at 16H00.

Written comments can be forwarded to mypd3@nersa.org.za

Nicolette Pombo-van Zyl
As the Editor of ESI Africa, my passion is on sustainability and placing African countries on the international stage. I take a keen interest in the trends shaping the power & water utility market along with the projects and local innovations making headline news. Watch my short weekly video on our YouTube channel ESIAfricaTV and speak with me on what has your attention.