Another significant Electricity Price Hike for 2015

If you are not sitting in the dark, your happiness will still be short-lived. Either you belong to one of the municipalities in the Free State were bulk power cuts are still on the cards, or you will have still – intermittent – electricity, but you may not be able to afford it anymore!

Electricity consumers will be hit with a 12.69% electricity tariff hike next year, the National Energy Regulator of SA (NERSA) announced. NERSA approved ESKOM’s plans to recoup losses after it had under-recovered money during the multi-year-price-determination 2 (MYPD2) control period between 2010 and 2013; once again an example how the people have to foot the bill for incompetence and waste.

h3. The “RCA” – What is that?

The RCA is a regulatory mechanism that allows ESKOM to adjust for over-or under-recovery of revenue, as initial price determinations are based on projections and assumptions.The increase, which will help shore up ESKOM’s shaky finances, could put upward pressure on inflation and add to already escalating costs for power-intensive industries such as mining. “NERSA announced that it has approved the implementation plan of the Regulatory Clearing Account [RCA] balance of ZAR 7.818m for Eskom Holdings,” NERSA said in a statement. “The RCA balance will be a once-off recovery from the standard tariff customers as well as other ESKOM customer categories and will only be implemented in the 2015 to 2016 financial year.” This meant consumers would pay an extra 4% on top of the 8% hike already approved under the MYPD3 control period in July this year. “The implementation of the second multi-year-price-determination RCA in 2015 to 2016 will result in an average tariff increase of 12.69% for standard customer tariffs from the 8% approved in the MYPD3 decision of February 2013.”

h3. Further support for ESKOM

The government recently approved a support package for ESKOM, allowing the utility to raise more debt and receive a capital injection from the state. ESKOM, which provides virtually all of South Africa’s electricity, faces a liquidity crunch as costs run ahead of revenues. It also faces a power squeeze, racing to build new plants to keep ahead of demand.

Either way, we continue facing dark ages ….

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