Eskom is now applying for a 32% tariff increase for the 2024 financial year, and the decision will be implemented on 01 April 2023.
The tariff application is under consideration by Nersa, and they are expected to make a final decision by 24 December this year.
Public hearings on the matter will be held next week.
In a statement, the power utility said higher diesel costs were one of the factors that necessitates the higher tariff application.
Other factors include:
- Removal of arrears debt-related costs – in line with NERSA’s decision for the 2023 financial year, where other customers do not contribute to the gap created by non-paying customers
- Removal of carbon tax-related costs – due to the announcement by the Minister of Finance of impending legislative changes to postpone carbon tax liability beyond 2025
- Increases in independent power producer (IPP) costs – mainly due to increased emergency IPP procurement
- Further reduction in the average energy availability factor for Eskom’s power stations of 59%
For the 2025 financial year, Eskom is applying for a 9.74% tariff increase.
Read more: SAWEA welcomes Round 6 of Renewable Energy IPP Procurement Programme
In addition, Eskom has made proposals to recover funds as part of the incorrectly deducted equity support from 2020 to 2022 (under MYPD4) as well as the regulatory account balance decision for the 2020 financial year.
These refer to prudent and efficient expenditure being recovered four to six years later.
The Supreme Court of Appeal has ordered that the remaining R59 billion of the incorrectly deducted equity be added to the allowable revenue decisions for each year, starting on 01 April.
This includes R15 billion each in the 2024 to 2026 financial years and R14 billion in the 2027 financial year.
The proposal is to allow these recovered amounts to be targeted towards the return on assets for the transmission and distribution network businesses.
Eskom says it also allows for further migration towards cost reflectivity for the Eskom network businesses.
More information on Eskom’s update of the FY 2024 and FY 2025 revenue applications can be found on Eskom’s website.
