Eskom’s 20% hike application tough decision for Nersa to make
[{“type”:”text”,”content”:”At the end of 2021, the National Energy Regulator of South Africa (Nersa) invited stakeholders to make written submissions on Eskomu2019s MYPD 5 revenue application for financial years 2022/23, 2023/24 and 2024/25. This follows an order by the High Court directing the regulator to ensure that new tariffs are in place on 1 April. The new tariffs are set to come into effect on 1 April for non-municipal customers and 1 July for municipal customers. nnIn its application, Eskom is proposing a tariff increase of 20,5% for the 2022/23 financial year. During the public hearings that took place from 17 to 21 January 2022, the power utility defended and argued that a majority of the cost increases were underpinned by two factors, supposedly out of their control: the requirement to increase the purchase of energy from independent power producers (IPPs) and the increase in carbon taxes. While these in principle may be noble and justified, there are a few fundamental questions and concerns that arise.nnBefore setting out the points of contention with the proposed rate hike, it is prudent to remind the readers that in performing its mandated functions, Nersa is required by the Electricity Regulation Act (ERA) to ensure that the following objectives are achieved, which they have admitted to being bound to:n* The efficient, effective, sustainable, and orderly development and operation of electricity supply infrastructure in South Africa;n* The interests and needs of present and future electricity customers and end-users are safeguarded and met, having regard to the governance, efficiency, effectiveness and long-term sustainability of the electricity supply industry within the broader context of economic energy regulation in the Republic;n* Investment in the electricity supply industry is facilitated;n* Universal access to electricity is facilitated;n* The use of diverse energy sources and energy efficiency is promoted;n* Competitiveness and customer and end-user choice are promoted; andn* A fair balance between the interests of customers and end-users, licensees, investors in the electricity supply industry and the public is facilitated.”,”position”:0,”id”:”u7sAura8OfqTvajK”}]