The National Energy Regulator of South Africa (Nersa) has announced that Eskom may increase tariffs to offset losses it has incurred over the last financial year.

This decision comes following a review of Eskom’s Regulatory Clearing Account (RCA) by Nersa for the 2018/19 financial year.

The RCA is a mechanism through which Eskom can apply to increase tariffs to make up shortfalls that occur between what Nersa assumes will happen during a year and what actually happens.

To that end, Eskom has been approved to recover R13.271 billion from standard tariff customers, local special pricing arrangement customers and international customers.

While this figure is high, it’s well below the R27.323 billion Eskom applied for in August 2019.

“The Energy Regulator records that certain governance failures occurred in Eskom. However, at the time of this decision and although some of the adjustments were effected in the decision, the extent of the governance failures or amounts associated therewith had not been fully quantified. Upon the completion of any investigations by any organ of state or commission into these governance failures, and if the failure is quantified, the Energy Regulator may, in future Eskom revenue applications, effect adjustments to Eskom’s revenue, based on the relevant outcome of the investigation,” Nersa cautioned.

The regulator has said it will publish its reasons behind this decision in due course.

[Source – Nersa]