determination (MYPD) for 2008/09
20 August 2007
The National Energy Regulator (Nersa) received an application from Eskom on
30 April 2007 to consider changing some of the current rules under which
Eskom's electricity prices are determined in the Multi-Year Price Determination
(MYPD). Eskom provided more information in support of its application to Nersa
on 18 July 2007 which included among others the quantification of its
risks.
The rule changes for 2008/09 applied for by Eskom are:
* the pass-through of the primary energy costs incurred by Eskom
* the allowance of compensation for the accelerated and increased capital
expenditure by Eskom
* the conditions for re-opening of the price determination.
If the application for rule changes for 2008/09 is accepted by the Energy
Regulator, this would have revenue implications for Eskom and there will be a
need for Nersa to adjust electricity prices starting from 1 April 2008.
The information that Eskom has submitted will be taken into account in
Nersa's evaluation of the application. Eskom's Annual Report for 2006/07
recently released predicts that the electricity prices will increase by 18% in
2008 and 17% in 2009. The Energy Regulator allowed Eskom a multi-year price
determination for three years which was 5,1% for 2005/6, 5,9% for 2006/07 and
6,2% for 2008/09.
The Energy Regulator has not made any decision with regard to changing of
price increase for 2008 and 2009 since it is still considering the application
and the outcome of the modelling that is currently taking place.
The Energy Regulator would like to re-iterate its position that it is not
negotiating with Eskom as it has been widely reported in the media about the
application for review of change rule that would affect the tariff increase as
predicted to 18% in 2008 and 17% in 2009 by Eskom. The Energy Regulator will
follow a vigorous consultation process which will allow the public and the
affected stakeholders to make comments before a final decision is made by the
Energy Regulator. In this regard, the Energy Regulator has approved a schedule
that will allow the public to participate in the process leading to the
decision regarding Eskom's application which is summarised as follows:
* publication of rule change (if any) and draft determination (if necessary)
on 17 October 2007
* public hearing on 22 November 2007
* approval of the final report and determination is made on 20 December
2007.
The Energy Regulator is encouraging all stakeholders and the public to take
into cognisance the above-mentioned deadlines and fully participate in the
process that will assist the Energy Regulator in its core mandate of balancing
the interests of the customers and the regulated utilities.
For more information contact:
Nhlanhla Cebekhulu
Head of Communication and Stakeholder Management
Tel: 012 401 4768
Cell: 082 560 8104
Issued by: Department of Minerals and Energy
20 August 2007
