NERSA decides on Eskom’s allowable revenues



 

The National Energy Regulator of South Africa (NERSA), at its meeting on 23 February 2017, confirmed Eskom’s allowable revenue of R205 214-million for the last year of the third multi-year price determination (MYPD3) period (2017/18 financial year).

The allowed revenue will result in percentage increase of 2,2% due to the base adjustments made in the preceding years as a result of the approved Regulatory Clearing Account (RCA) balances for Eskom (12,7% for 2015/16 and 9,4% for 2016/17).

The Energy Regulator confirmed the allowable revenues on the basis of the approved MYPD3 revenues and average price for 2017/18. The allowed revenue for 2017/18 is Eskom’s full year’s revenue as determined in the MYPD3 decision. The allowed revenue will be able to cover all of Eskom’s allowed costs, plus a return to the value of R33 667-million as per the MYPD3 decision.

The allowed revenue will be able to cover all of Eskom’s allowed costs, plus a return to the value of R33 667-m as per the MYPD3 decision. The allowable revenue also includes an amount of R23 018-million for the Independent Power Producer (IPP) purchases as a cost pass-through in line with the MYPD3 methodology.

The cost recovery mechanism for IPP purchases will still be implemented. In this regard, any over or under-recovery will be dealt with through the RCA mechanism. The decision by the Gauteng High Court has impacted on NERSA’s processes in considering the RCA application.

Nothing prevents Eskom from considering any possible cash flow risks and the implications thereof on its financial sustainability and make an application to NERSA for relief in this regard should it consider it necessary.

Contact Poppie Mahlangu, NERSA, Tel 012 401-4780, poppie.mahlangu@nersa.org.za

 

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Source: EE plublishers

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