Independent Online

Saturday, May 21, 2022

Like us on FacebookFollow us on TwitterView weather by locationView market indicators

Nersa hastens to comply with order to comply with court on new Eskom tariffs

NERSA confirms that Eskom’s revenue application amounts to R279 billion, R335bn and R365bn for the 2022/23, 2023/24 and 2024/25 financial years, respectively. Picture: Courtney Africa , ANA.

NERSA confirms that Eskom’s revenue application amounts to R279 billion, R335bn and R365bn for the 2022/23, 2023/24 and 2024/25 financial years, respectively. Picture: Courtney Africa , ANA.

Published Dec 9, 2021

Share

THE National Energy Regulator of South Africa (Nersa) yesterday began complying with an order of the Gauteng High Court in Pretoria to process Eskom’s Fifth Multi-Year Price Determination (MYPD5) revenue application for the 2022/23 financial year, in line with  judgment delivered on December 3.

Last week the court threw aside Nersa’s objections that Eskom’s MYPD5 revenue application has been developed using the MYPD4 methodology that Nersa published in October 2016. Nersa rejected this application, part of which was successfully challenged by Eskom as part of a high court review of the Nersa decision.

Story continues below Advertisement

In a statement yesterday, Nersa announced the release of the consultation paper  alongside Eskom’s MYPD5, which covers the three financial years from 2022/23 to 2024/25.

Nersa confirmed that Eskom’s revenue application amounts to R279 billion, R335bn and R365bn for the 2022/23, 2023/24 and 2024/25 financial years, respectively, but the letter of the court's decision would limit the consideration of the application to the R279 required for 2022/23.

Nersa confirmed in its statement it was adhering to the order that Eskom’s revenue application submitted on June 2, 2021, that it started the public participation process by yesterday, December 8, and made a decision by February 25.

Nersa has set itself to announce the decision by February 22nd next year.

“With the court having compelled Nersa to consider the 2022/23 in terms of the 2016 Methodology, Nersa does not have the discretion to consider the other two years of the application submitted on June 2, 2021 because the other two years are still bound by the decision of the Energy Regulator of September 2021 to reject the three years’ application,” the regulator said in its consultation paper released yesterday.

Nersa said its founding law did not allow it to revisit a decision that it had taken at its own instance.

Story continues below Advertisement

“The expectation is that Nersa will implement the court order as it is, otherwise Nersa risks being in contempt of court, which may result in the Energy Regulator members appearing in court,” it said.The regulator’s major issue with Eskom was that the utility delayed to submit its 3-year application by early March as is statutory but did so in June.

Eskom further sought judicial review to set aside the decision of the Energy Regulator taken on September 30, 2021 to reject Eskom’s MYPD5 revenue application for the financial years 2022/23, 2023/24 and 2024/25.

The court hearing for the judicial review is pending.

Story continues below Advertisement

“In a nutshell, the consideration of Eskom one-year revenue determination through the 2016 methodology is a consequence of a court order and not the discretion of the Energy Regulator,” Nersa said.

The regulator said although only the Eskom revenue application was limited to projected revenue required to cover forecast 2022/23 costs, there were a number of already approved revenues, court orders and pass through costs that would also need to be recovered in the FY 2022/23 revenue determination.

Nersa said the following had been considered when developing the impact of total assumed revenues: the revenues are as per Eskom’s application without prudence test conducted and include a recovery of the R46 billion government support, which was the subject of a 2020 court order.

Story continues below Advertisement

It said considering the impending changes to the MYPD methodology, the total outstanding R46bn had been included under FY 2022/23.

[email protected]

BUSINESS REPORT ONLINE

Related Topics:

energy industryEskom

Share