NERSA’s MYPD approval of 8% instead of 16%: response by Eskom & SALGA

PMG 24 May 2013.

Date of Meeting:24 May 2013
Chairperson:Mr S Njikelana
Summary:

The meeting looked at the rationale behind the National Energy Regulator of South Africa’s price determination of 8% in response to Eskom’s request for a 16% tariff increase. The South African Local Government Association (SALGA) was asked to respond to the 8% increase on behalf of municipalities. Continue reading

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Hints of more support as Eskom mulls ways to plug R225bn hole

Terence Creamer | 24 May 2013 | Engineering News

Eskom reaffirmed to the Parliamentary Portfolio Committee on Energy on Friday that it would not, through efficiencies alone, be able to close the R225-billion financial gap arising from the lower-than-requested tariff determination for the coming five years.

Several other responses were, therefore, being pursued, including an initiative to identify whether additional support might be required from the utility’s shareholder, the South African government.

On February 28, the National Energy Regulator of South Africa (Nersa) granted Eskom yearly increases of 8% for the period from 2013/14 to 2017/18, instead of the 16% it had requested. This translated into allowable revenue for the period of R862-billion, rather than the nearly R1.1-trillion sought. Continue reading

Power price determination relatively fair – MPs

Engineering News 28 March 2013.

MPs are cautiously optimistic about the National Energy Regulator of South Africa’s (Nersa’s) determination of electricity tariffs, Parliament’s energy portfolio committee chairperson Sisa Njikelana said on Wednesday.

“It’s worth looking at with a smile. I caution and qualify my response because we still have to get Eskom to respond to it,” Njikelana said after Nersa briefed the committee on the power price determination process.

Nersa assured the committee that Eskom would not be bankrupted by the decision to increase electricity tariffs by 8% over the next five years…

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Eskom should do the right thing

Business Day Live 5 March 2013.

THE decision by the National Energy Regulator of SA (Nersa) to limit power utility Eskom to an 8% average increase a year for the next five years comes as an enormous relief. This is especially true for business, which is under strain from many other things that are making doing business extremely tough. The political pressure to keep the increases down has also been apparent.

Yet within the relief there is room for a few questions to be asked. First, how is it possible for Eskom to ask for a 16% increase every year for five years, and for Nersa to halve this number? Either Nersa’s calculations are horribly wrong, or Eskom’s claim that it is trying its best to keep electricity prices as low as possible is bunkum. The second question is tricky: has Nersa overreacted to political pressure to keep electricity prices low? Is it asking too much of Eskom?

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Call for industrial sector to save energy

Mail and Guardian 22 February 2013.

A 5% reduction would equate to 6 000 gigawatt hours a year and would cost less than new power plants.
Large energy consumers have warned that Eskom’s proposed electricity hikes of 16% a year for five years threaten economic growth and jobs. But environmental experts argue that energy-efficiency measures are being overlooked as a way to address power shortages and rising costs. Some estimate that the cost of energy-saving technologies could be four times less than the cost of new power plants…

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Electricity tariff decision expected on Thursday

Mail and Guardian 25 February 2013.

A decision on Eskom’s proposed new electricity prices will be announced on Thursday, the National Energy Regulator of South Africa has said.

It would do so by way of a news briefing in Pretoria, the National Energy Regulator of South Africa (Nersa) said on Monday.

Eskom has asked for a 16% increase in electricity prices in each of the next five years, which will more than double the price, taking it from 61 cents a kilowatt hour (kWh) in 2012/13, to 128 cents a kWh in 2017/18…

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South Africa ‘needs cheaper power for growth’

Business Day Live 22 February 2013.

IF SOUTH Africa wants to increase economic growth and reduce unemployment, it needs more reasonably priced, available electricity, Econometrix MD Rob Jeffrey says.

The official gross domestic product (GPD) growth figures are expected next week but analysts expect that it will be in the 2.5%-2.6% range, substantially lower than the mooted 5% growth needed to address the country’s 25% unemployment. These growth figures also lag significantly behind other African economies…

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