Consumers will pay a lot more for electricity in 2015

Pretoria – Power utility Eskom has welcomed the National Energy Regulator of South Africa’s (Nersa) decision to recover R7.8 billion for the under-recoveries for the Multi-Year Price Determination (MYPD2) period.

“Eskom welcomes the decision regarding a balance in its favour,” it said in a statement.

This means that consumers will pay more for their electricity as a result of the Regulator’s decision.

On Wednesday, Nersa announced that it has approved the Regulatory Clearing Account (RCA) for the power utility.

The RCA is a regulatory mechanism that allows Eskom to adjust for over or under recovery of revenue.

The RCA reconciles the variance between projected and actual revenue and certain costs, as the price determination is initially based on projections and assumptions.

The under recovery is for the MYPD2 control period of 2010-2013.

Eskom said it could not determine what the impact of this would be on its customer categories.

“The Regulator did not decide on the liquidation of the balance. Eskom cannot determine what the impact will be on specific customer categories as the Regulator will still decide on how this balance will be liquidated.

“What is positive at this stage is that a robust process was followed in conducting the RCA process, which is an illustration of the application of the regulatory mechanism that supports the implementation of the Electricity Regulation Act,” Eskom Chief Executive Collin Matjila said.

“Eskom looks forward to continue working with Nersa on further RCA submission in accordance with the revised MYPD methodology, as published during December 2012,” he said.

NERSA’s Multi-year Price Determination (MYPD) methodology allows for Eskom, after financial year end, to submit its Regulatory Clearing Account (RCA) application based on audited financial statements.

Once the application is submitted, the variances are subject to a prudency review by NERSA.

The RCA balance application for the MYPD 2 three-year period (2010-2013) was submitted to Nersa in the last quarter of 2013.

In its statement on Wednesday, Nersa said the approved RCA balance will be implemented in the 2015/16 financial year.