Fri. Feb 26th, 2021

Consumers face hefty electricity price hikes

Lyse Comins South African consumers must brace for further double digit electricity price hikes after a consent order handed down in the North Gauteng High Court has allowed debt strapped Eskom to recover a further R10 billion from customers in 2021/22. The National Energy Regulator of South Africa (NERSA) said consumers could expect price increases […]

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Eskom. Photo: File

Lyse Comins

South African consumers must brace for further double digit electricity price hikes after a consent order handed down in the North Gauteng High Court has allowed debt strapped Eskom to recover a further R10 billion from customers in 2021/22.

The National Energy Regulator of South Africa (NERSA) said consumers could expect price increases of more than 15% after the court ordered that an amount of R10 billion be added to Eskom’s allowable revenue to be recovered from tariff customers in the 2021/22 financial year. 

The consent order follows Eskom’s application in terms of section 18(3) of the Superior Courts Act, 2013, that Eskom should be allowed to recover R23 billion in the financial year 2021/22 according to an earlier 28 July 2020 court ruling.

Nersa said Eskom had engaged in discussions with the regulator and the parties had entered into an agreement that led to the court handing down the consent order.

R69 billion Eskom clawback impact on electricity price hikes

“The agreement was informed by the fact that NERSA has already taken decisions on other Eskom applications that will be implemented in the 2021/22 financial year, which had a direct impact on the application Eskom has made to the court,” Nersa said in a statement. However, NERSA said the order would not stop the regulator from proceeding with the appeal that it had already filed in the Supreme Court of Appeal against the High Court judgement of 28 July 2020. The judgment had ruled against Nersa’s earlier decision, which had disallowed Eskom’s fourth Multi-Year Price Determination (MYPD4) to claw back R69 billion from consumers, with the first R23 billion tranche set for recovery in 2021/22.

Nersa added that it had also approved Eskom’s Regulatory Clearing Account (RCA) applications for year 2 (2014/15), year 3 (2015/16) and year 4 (2016/17) of the third Multi-Year Price Determination (MYPD3) period as well as Eskom’s supplementary tariff application for the 2018/19 financial year of R4, 749 billion and R1, 288 billion  respectively, be recovered in the 2021/22 financial year. 

This will result in an average tariff percentage increase of 15.63% in the 2021/22 financial year Nersa said.

Energy analysts had earlier commented that the move to claw back R23 billion, would add an extra 10% to the electricity price increase in 2020/21 if the order was granted.

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