South African energy regulator Nersa has approved the new Energy Price Determination Rules (EPDR) following a lengthy consultation process with stakeholders in 2023. The regulator made the decision to approve the new rules at its meeting on 14 December 2023 and has subsequently published the various engagements with stakeholders, including Eskom, and reasons for approving the rules for public consumption.
Nersa has been developing the new rules in a bid to steer away from the current pricing methodology – the Multi-Year Price Determination (MYPD) – which has resulted in massive tariff hikes for consumers over the past few years, including another double-digit hike coming in 2024. Among the many changes to the new pricing methodology, one of the biggest is the removal of the Regulatory Clearing Account (RCA) component of tariff hikes, which has been hugely beneficial to Eskom. In simple terms, under the MYPD methodology, Nersa allows Eskom to apply for future tariff hikes based on the costs of its operations as well as projected revenues from sales
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