ESKOM, the South African state-owned power utility, has asked the National Energy Regulator of SA (Nersa) for a 15% tariff increase for the next three years, beginning 2019-2020, said BusinessLive citing an announcement by the utility on October 19.
While Nersa, which will hold public hearings and evaluate the application, seldom grants Eskom its full request, Eskom’s application indicates that double-digit electricity increases will very likely continue into the next three years, the publication said.
Electricity prices rose 350% in the 10 years prior to 2017, compared to inflation which was 74% over the period. High electricity prices are viewed as a drag on economic growth and an increasing burden on consumers.
Nersa evaluates Eskom’s tariff application according to a methodology that allows the company to claim a return within certain limits and scrutinises costs to ensure they are justifiable. The Nersa methodology also allows Eskom to claw-back justifiable costs retrospectively by adding them to tariffs for future years.
