Eskom could increase tariffs by up to 10.95% after regulator's decision

An electricity pylon.
An electricity pylon.
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The National Energy Regulator of SA has allowed Eskom to collect an additional R6 billion of allowable revenue, in what could potentially see it implement tariff increases of up to 10.95% from April.

In an announcement on Thursday, the regulator stated that the additional revenue would be recouped by Eskom over the 2021/22 financial year. Nhlanhla Gumede, who is responsible for Electricity Regulation at Nersa, stated that the figure still required approval.  

Nersa's decision is based on Eskom's Multi-Year Price Determination regulatory clearing account applications for the three financial years 2014/2015, 2015/2016 and 2016/2017, and the firm's supplementary revenue application for 2018/2019.

Gumede said the implication of the decision would be a tariff increase of between 8.12% and 10.95% if it were all liquidated in the 2022 financial year.

Nersa said there seemed to be a correlation between tariff increases and a decrease in electricity demand."As Eskom tariffs have been increasing, the demand for electricity has been declining... this could be due to substitution or other reasons," said Gumede. 

Eskom had originally applied for R66.6 billion terms of the Regulatory Clearing Account, but Nersa allowed it R34.69 billion, prompting a court challenge by Eskom. In June 2020, the High Court ordered the regulator to review the decision.

The power utility said in statement it will have to assess whether the decision is in line with the High Court judgement and order.

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