- NERSA rejects Eskom’s Multi-Year tariff determination application
- Asks Eskom to submit a one-year interim application for 2022 financial year
South Africa’s energy regulator, the National Energy Regulator of South Africa (NERSA), has rejected the multi-year tariff determination application of the state-owned electric utility, Eskom. NERSA, while rejecting the Eskom application, asked the utility to submit a one-year interim application based on the new price determination methodology, which is currently under consideration by the regulator.
In June this year, Eskom had applied for the Fifth Multi-Year Price Determination (MYPD5) for 2022, 2023, and 2024 financial years using the MYPD4 model, whose applicable period will end on 31st March 2022. In a statement, NERSA confirms that it has endorsed a review of the MYPD5, and subsequently rejected Eskom’s application.
“After due consideration of the rationality and legality of applying an expired MYPD4 methodology and whether this was in the public interest, the Energy Regulator rejected Eskom’s MYPD5 application,” NERSA said.
”The new price determination approach will also take into consideration the rapid transformation of South Africa’s electricity sector, respond to the transformation of the Electricity Industry and associated energy security concerns, rising electricity prices as well as the increase in self and private sector electricity generation.” NERSA’s statement read.
NERSA has put the deadline for public comments on its MYPD5 pricing methodology for 22nd October 2021. Under the proposed methodology, NERSA seeks to abolish the ‘allowable revenue’ component for future tariff methodologies depriving Eskom of at least R50 billion in revenues.