The National Energy Regulator of South Africa (NERSA) has rejected Eskom’s Fifth Multi-Year Price Determination (MYPD5) revenue application for the financial years 2022/23, 2023/24 and 2024/25.
This means that the energy regulator does not agree with the price hikes that Eskom has proposed consumers pay for electricity over the three upcoming financial periods.
Nersa announced on Thursday that it had rejected Eskom’s price multiple year price increase proposal at a meeting held on 30 September.
“The energy regulator endorsed the MYPD5 pricing methodology review and consequently rejected Eskom’s Fifth Multi-Year Price Determination (MYPD5) revenue application for the financial years 2022/23, 2023/24 and 2024/25,” Nersa said in a statement. Nersa said that it had embarked on a consultation process to gather comments from stakeholders to assist in the development of the new methodology that will ensure sustainable electricity prices.
“In this regard, NERSA has published a consultation paper on principles to be used when determining electricity prices for the oncoming tariff setting period. The new price determination approach will also take into consideration the rapid transformation of South Africa’s electricity sector, respond to the transformation of the Electricity Industry and associated energy security concerns, rising electricity prices as well as the increase in self and private sector electricity generation,” Nersa said.
Nersa received Eskom’s MYPD5 revenue application on 2 June 2021. The application was based on the MYPD4 methodology, with an applicable control period ending on 31 March 2022.
“After due consideration of the rationality and legality of applying an expired MYPD4 methodology and whether this was in the public interest, the energy regulator rejected Eskom’s MYPD5 application,” Nersa said.
Nersa said that it would ask Eskom to submit a one-year interim application for the 2022/23 financial year, preferably based on the principles of the new approach that is under consideration.