Eskom approaches Nersa seeking approval of new tariff structures

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Published Aug 8, 2022

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Johannesburg – Eskom has submitted a new revised tariff structure to the National Energy Regulator of SA (Nersa), having last revised it's pricing structures over 10 years ago.

If passed, the new tariff structure will come into effect from April next year.

Eskom said it was submitting a new tariff structure to the regulator based on an updated cost-to-serve study.

The power utility said the process was governed by laws and regulations, including the Electricity Regulation Act and the Electricity Pricing Policy.

It said the new tariff plan was a revised version off the 2020 plan it submitted to Nersa when the government announced the unbundling of Eskom into three separate entities for generation, distribution and transmission.

The new tariff plan also takes into account President Cyril Ramaphosa’s new energy plans as announced this month, including allowing private households and private companies to feed power into the grid.

Eskom’s group executive for distribution, Monde Bala, said the current tariff structures are outdated and need to be modernised to reflect the changing electricity environment.

He said “crucial decisions” need to be made to protect the electricity industry.

“For example, customers are installing their own power generators and are using the grid in different ways, and the wheeling of energy is also expanding.

“Fair and equitable revenue recovery from all customers for the services provided can only happen with tariffs and tariff structures that are modernised to reflect this changing environment,” said Bala.

He added: “When updating tariffs and implementing structural changes, it is not possible to have zero impact on all customers.

“Therefore, while the structural changes proposed will recover the revenue approved by Nersa in line with Nersa’s approved multi-year price determination (MYPD) methodology, individual customers may pay more or less, depending on the change and their consumption profile”.

Eskom said the restructuring of the tariff was being done to accurately reflect: the costs of the different services being provided; in order for energy charges to reflect energy costs; network charges reflect network costs; and service charges reflect the cost of customer service and administration.

The power utility said this would ensure that cost drivers were captured more accurately, protecting customers interests, avoiding unfair cross-subsidies, enabling fair recovery of costs by all users of the grid, and providing the correct economic signals while ensuring recovery of Nersa-approved revenue by Eskom.

Meanwhile, Eskom suspended its rolling blackouts at the weekend, citing a recovery in generation reserves.

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