Eskom wants electricity consumers to pay a whopping R1.5-trillion over three financial years.
This emerged as the National Energy Regulator of South Africa (Nersa) this week published Eskom’s multi-year price determination (MYPD) revenue application for up until 2028.
According to Eskom, the application covers the power utility’s financial period beginning April 1, 2025, to 31 March 2028.
Eskom explained that it follows the MYPD methodology as prescribed by the regulatory authority.
“This methodology is now in its sixth application. Hence the process is referred to as MYPD 6,” the statement read.
Analysis and public consultations
Nersa will decide on the revenue Eskom can receive following its analysis and the regulator conducting a series of public consultations.
Eskom believes that this application allows for an improvement in the financial sustainability of Eskom. This through the migration to cost-reflective prices and the successful operation of generation, transmission and distribution in Eskom.
“Further migration towards cost reflectivity to cover the full cost of capital would be considered in subsequent applications. This would minimise the impact on the taxpayers.”
Eskom said Nersa will then make tariff decisions for implementation from 1 April 2025. This is in accordance with its revenue decision.
As per Eskom, it can only implement tariff decisions made by Nersa.
“We are entering the next phase of the regulatory process. This is where Nersa will conduct an extensive public consultation about Eskom’s revenue application. And we urge as many stakeholders as possible to become involved. So that Nersa can determine a key component in the funding of a constant electricity supply that drives economic growth. Also our quality of life for years to come,” said Eskom CFO Calib Cassim.
Affordability to be considered
Cassim stated that as Nersa makes its decision, it will consider affordability for identified vulnerable sectors. These include indigent customers and certain industrial sectors.
“Eskom has made its revenue application based on the costs it will incur to efficiently provide electricity to the customer. And it is a critical component in ensuring Eskom continues to provide reliable electricity services. While improving its financial sustainability through a migration to cost-reflective prices,” he added.
The utility said it was applying for total revenues of R446-billion for the 2026 financial year. R495-billion for 2027 and R537-billion for 2028.
This translates to the proposed average price increases for Eskom direct customers being 36.15%. This is for April 1 2025 to March 31 2026. An 11.81% (April 1 2026 to March 31 2027). And 9.10% (April 1 2027 to March 31 2028).
Retail tariff plan (RTP) application
In addition to the MYPD 6 application, Eskom submitted a retail tariff plan (RTP) to Nersa. It outlined proposed structural changes, which are expected to be implemented from April 1, 2025. This is once all Nersa approval and governance processes are concluded.
“The RTP aims to introduce cost-representative pricing. A pricing that supports the long-term sustainability of all participants in the electricity supply industry.”
Nersa will consult with stakeholders on Eskom’s revenue application as part of its decision-making process.
Eskom is required to submit to the regulator the revenue it requires for Nersa to make its determination.
- SAnews.gov.za
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