Energy regulator Nersa has rescinded its approval of new electricity pricing rules – leaving South Africans to deal with ‘exponential’ tariff hikes for longer.
Energy regulator Nersa has rescinded its decision from December 2023 to approve a new electricity pricing methodology in South Africa – leaving Eskom free to keep applying for massive price hikes each year to cover its losses.
Under the MYPD methodology, Nersa allows Eskom to apply for future tariff hikes based on the costs of its operationsThe RCA monitors and tracks uncontrollable costs and revenues assumed in Nersa-approved tariff hikes and compares them to the actual costs and revenues incurred by Eskom. A major gripe of the RCA is that it allows for various costs to be included in the formula beyond sales and revenue, such as coal burn costs, independent power producer costs, levies, and – importantly – Open Cycle Gas Turbine costs.
He said the rate at which Eskom tariffs and municipal tariffs are increasing is unsustainable, describing it as “an untenable situation”. The rising cost of electricity will also have a knock-on effect on municipal revenue. As power becomes more unaffordable, households are forced to choose between basic necessities – and if the choice is between “more bread or more power”, the answer is clear.
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