The National Energy Regulator of SA (Nersa) has entered a consent order to add R10 billion to electricity tariffs in the coming financial year, which will push power prices up by more than 15%.
The Pretoria High Court ordered Nersa to add R10 billion to Eskom’s allowable revenue to be recovered from tariff customers in the 2021/22 financial year, starting in April. This after R6 billion in increases approved by the regulator for implementation in the coming financial year. In a statement Nersa said this will result in an average tariff percentage increase of 15,63% in 2021/22.
The news of further increases comes as the utility continues to push for cost-reflective tariffs. Businesses, however, argue that many enterprises cannot survive higher power prices.
Eskom to recover R23 billion in 2021/22
The consent order follows Eskom’s application that it be permitted to recover R23 billion in the 2021/22 financial year as per a court judgment handed down in July 2020. In that order, the court found that Nersa should not have included a R69 billion government bailout into its calculations when determining tariff increases for the utility.
Nersa is now required to add the R69 billion, broken up into three amounts of R23 billion, to electricity tariffs over the coming three financial years. The regulator was granted leave to appeal the judgment, which effectively suspended the implementation order but prompted the cash-strapped Eskom to approach the court for the first tranche of tariff increases to be implemented.
In a statement Nersa said the consent court order follows discussions and an agreement between itself and Eskom. Instead of R23 billion, R10 billion was agreed as Nersa has already taken decisions on other Eskom applications that will result in tariff increases in the 2021/22 financial year.
As stipulated in the consent order, an amount of 5,44c/kWh will be added to the average standard tariff for Eskom customers in the 2021/22 year, making the aggregate average standard tariff for direct customers 134,30c/kWh. The order does not stop Nersa from proceeding with the appeal that has commenced at the Supreme Court of Appeal against the High Court’s judgment of July 2020. – Times Live