Giant energy provider, Eskom made an urgent application to Nersa with the thrust of a tariff hike . The power utility cited that it would want Nersa to give it a green light to increase the electricity tariff hike by 25.3% for the 2015/2016 financial year, the national energy regulator said on Friday.
This includes the 12.69% tariff hike that has already been approved by Nersa. In a statement, Nersa said Eskom has now applied to the regulator for the selective reopening of the Third Multi-Year Price Determination (MYPD3) decision for the 2015/2016 to 2017/2018 period.
Why the tariff hike?
Eskom argued that it wanted tariffs to be hiked because it requires cost recovery of R32.9bn for Open-Cycle Gas Turbines (OCGTs) and R19.9bn for the Short-Term Power Purchase Programme (STPPP). The state-owned company wants a 10.10% selective reopener for OCGTs and STPPP and a 2.51% increase in the environmental levy by 2c/kWh.
Eskom presented its selective reopener application for consideration by the Energy Regulator last week. This follows Eskom’s conclusion of its consultation process with the South African Local Government Association (Salga) and National Treasury. Energy regulator, Nersa, said in its statement that it was considering the application, taking into consideration the urgent need to stabilise the electricity network to avoid a possible total blackout and Eskom’s operational and financial challenges.