Cape Town – Two days after Eskom reported R4.6bn in profit for the year, the National Energy Regulator (Nersa) said it approved Eskom’s application for an extension to submit a new tariff increase application.
The new application comes after Nersa approved a 9.4% electricity tariff hike on 1 March, which kicked in on 1 April this year.
Nersa said in a statement on Thursday that it had “approved Eskom’s application for an extension to submit the new Multi-Year Price Determination (MYPD) application until 1 April 2017”.
This new MYPD comes after it approved Eskom’s MYPD3 Regulatory Clearing Account (RCA) application for the financial year 2013/14 earlier this year.
Eskom's bottom line profit for the year ending 31 March 2016 was R4.6bn.
Revenue rose 10.6% to R163.4bn. The public utility's EBITDA increased by 37.4% to R32bn, up from R23.3bn reported in the previous year.
Cost savings reached R17.5bn, above the R13.4bn target and surpassing the previous year's R9bn, said Eskom CEO Brian Molefe. And 57% of funding for 2016/2017 has been secured.
“Financial performance improved against the previous year, and all financial ratios showed improvement due to improved operating results, as well as the conversion to equity of the subordinated government loan and equity injection of R23bn,” said Eskom CEO Brian Molefe. “Operating results also improved due to stringent cost containment measures.”
As part of its decision on Thursday, Nersa asked Eskom to submit a new MYPD application within three months based on the revised assumptions and forecasts that reflect recent circumstances.
Eskom applied for a RCA balance of R22.8bn, but the energy regulator only allowed R11.241bn. The larger part of this difference was because Eskom did not disaggregate the special pricing agreements and international sales when allocating the approved MYPD3 revenues to different customer categories, said Nersa.
Explaining the extension for Eskom to submit an application on Thursday, Nersa said: “Eskom cited statutory consultation requirements and the revision of the MYPD methodology as reasons for the request.
“The Energy Regulator also decided that Eskom’s RCA applications for the second and third years of the MYPD3 (2014/15 and 2015/16) should be submitted together.
“The two RCA applications will be processed simultaneously once they have been received.
“In view of the above, the process of reviewing the MYPD methodology has been extended to allow further consultations with stakeholders.”