Eskom wants 3% on top of any tariff hike for three years to claw back R66bn-plus

Date: May 15, 2018

State-owned electricity utility Eskom has proposed a five-year phasing-in period to recoup R66-billion-plus in cost and revenue variances contained in three separate Regulatory Clearing Account (RCA) applications.

The applications are being adjudicated simultaneously by the National Energy Regulator of South Africa (Nersa), which wrapped up nationwide public hearings in Midrand on Monday.

The applications cover the financial years 2014/15, 2015/16 and 2016/17, which all fell within the third multiyear price determination (MYPD3) window, which operated for five years between April 1, 2013 and March 31, 2018.

The RCAs are being adjudicated simultaneously following a protracted period during which Nersa refrained from assessing new RCAs, owing to a 2016 High Court ruling, deeming as illegal the RCA adjudication process carried out for the 2013/14 financial year.

However, subsequent rulings by the Supreme Court of Appeal and, again in August last year, by the Constitutional Court, opened the way for Nersa to begin processing RCA applications once more.

On the final day of the public hearings in Gauteng, the utility argued that the amount could be recouped through three separate yearly increases of 3% over-and-above any tariff hikes approved as part of the fourth multiyear price determination (MYPD4), which Nersa would deliberate upon later this year.

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