South Africa: Eskom Fights Tooth and Nail for Massive Price Increases in the Years Ahead

analysis

Through the courts and an application to Nersa, Eskom is seeking to claw back massive additional revenue from electricity customers via tariffs -- over and above its normal annual electricity price increases.

The South African general public might be justifiably confused about the details, timing, outcomes and implications of three court actions by Eskom challenging a number of previous determinations by energy regulator Nersa.

Customers might also not understand the implications of the latest regulatory clearing account (RCA) application by Eskom for its 2018/19 financial year, which is not yet the subject of any legal challenge.

Eskom insists its electricity prices are far from cost reflective and they need to rise by 30% in order to become so. Thereafter, Eskom says electricity prices would stabilise, with only inflationary increases in subsequent years.

Eskom's court actions

Nersa's fourth multi-year price determination for the 2019/20, 2020/21 and 2021/22 financial years

In late 2019, Eskom applied for urgent interim relief pending a full judicial review of Nersa's fourth multi-year price determination (MYPD 4) for the 2019/20, 2020/21 and 2021/22 financial years.

Eskom wanted revenue of R219-billion, R252-billion and R291-billion respectively for each year (i.e. a 16% increase for each year), but was only...

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