The electricity regulator has delivered a strong signal to Eskom that it is not open to steep tariff increases in future and that the power utility must look at shutting inefficient power stations and cutting its head count and capital spending to tailor its cost base to lower sales volumes. The National Energy Regulator of SA (Nersa), which in mid-December granted Eskom a 5.2% tariff increase for 2018-19 instead of the 19.9% Eskom had applied for, has published the reasons for its decision on the tariffs on its website, painting a picture of inefficiency, inaccurate forecasting and cost overruns at Eskom. Eskom’s most recent five-year multiyear price determination from Nersa (MYPD3) expires on March 31 and the power utility was supposed to submit an application for a further five-year determination, but in 2016 asked Nersa for a one-year interim tariff increase, ahead of the five-year application, which must be submitted later in 2018. Eskom has also put in regulatory clearing acco...
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