‘Between a rock and a hard place’ - Nersa to announce possible electricity tariff hikes

Nersa will on Thursday announce its decision on Eskom’s Third Multi-Year Price Determination Regulatory Clearing Account (RCA) applications for the financial years 2014/15, 2015/16, 2016/17 and Supplementary Revenue application for the 2018/19 financial year per high court judgments.

Eskom turned to the high court to dispute the regulator’s decision to only award it RCA balances of R32.69 billion for those three financial years, compared to the R66.6 billion it had sought.

The court ruled in favour of Eskom, saying Nersa disallowed Eskom money for lower-than-forecast revenue based on a “fundamental factual error”.

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Nersa will now have to come up with new decisions, which could lead to higher tariff prices.

Yellend says while it is obviously important for Eskom to be a sustainable business, the regulator must also take consumers and the economy into consideration.

"It's no use giving Eskom low price increases to the extend where they cannot do their job properly.

"On the other hand, the interest of customers and economy need to be taken into account, especially now during the pandemic, will have a very negative impact on the economy and cause a lot of hardship for the customers.

"That is a balance that has to be struck by Nersa," Yellend said.