2. Pricing and Tariffs
2.1. Municipal Tariff Analysis Update
- NERSA must approve the application of the two-year incentive pricing package and similar applications from eligible customers, under its powers as per Section 15(3) of the Electricity Regulation Act 4 of 2006.
- NERSA must also immediately commence working with the Department of Energy and NERSA licensees to put in place cost-reflective tariffs for energy-intensive customers to ensure their longer-term sustainability.
Earlier this month, the National Energy Regulator of South Africa (NERSA) published an application for a negotiated price agreement (NPA) for Silicon Smelter’s operation.
The EIUG’s response lamented the current economic state and the decline in electricity sales from industrial and mining sectors and emphasised the continued risk of the utility death spiral, should no action be taken.
The EIUG’s recommendation was that NERSA must urgently approve Eskom’s application for the Two-Year Incentive Pricing Package. NERSA must also approve similar applications from eligible energy-intensive customers, supplied either from Eskom or municipal licensees. NERSA has the legislative power to approve the Two-Year Incentive Pricing Package under Section 15(3) of the Electricity Regulation Act 4 of 2006.
In parallel, the EIUG urged NERSA to immediately commence working with the Department of Energy and NERSA licensees to put in place cost-reflective tariffs for energy-intensive customers, to ensure their longer-term sustainability.
The full submission, along with Business Unity South Africa’s (BUSA) submission is available on the web portal.
2.2. Analysis of Eskom’s Financial Statements
Nick Saunders from The Eton Group has undertaken a review of Eskom’s recently announced Financial Statement. The following article is a summary of the full report which is available on the web portal and can be downloaded here.