Eskom lowers tariff application

By December 6, 2017Articles
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Eskom interim CFO Calib Cassim making closing remarks at energy regulator Nersa’s public hearing in Midrand. Picture: Moneyweb

Power giant Eskom has lowered its tariff application for 2018/19 from an average 19.9% for its direct customers to 18.9% and 27.5% to 26.9% for municipalities.

The utility announced adjustments at the closing of energy regulator Nersa’s public hearings about the application.

Nersa is expected to announce its decision on December 7. The new tariffs will take effect on April 1 for Eskom’s direct customers and July 1 for municipalities and their customers.

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Eskom interim CFO Calib Cassim said Eskom’s revenue requirement has dropped by R6.6 billion to R212.8 billion after it excluded costs to be paid to some Independent Power Producers (IPPs) for renewable energy. The original application included some projects that would not be ready to sell electricity to Eskom during 2018/19 and these are the ones that have now been removed.

This led to a reduction of R7 billion in the revenue requirement.

Eskom then added R450 million to its primary energy cost to replace the volume of energy those renewables would have supplied with coal generation.

The net effect is a revenue reduction of R6.6 billion.

Eskom’s sales forecast has also been revised downward based on more recent sales figures. It has revised its expected sales volumes to standard customers downward from 192 953GWh to 188 082GWh.

The net effect is that, according to Eskom’s calculations, standard customers should pay 18.9% more and not 19.9%.

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