The National Energy Regulator of South Africa (NERSA) publishes Eskom’s revenue application for the next three financial years (FY 2026 to 2028).
24 September 2024
The National Energy Regulator of South Africa (NERSA) published Eskom’s Multi-Year Price Determination (MYPD) 6 revenue application for the period of Eskom’s Financial Years (FY) 2026 to 2028 (1 April 2025 to 31 March 2028) on 23 September 2024.
NERSA will consult with stakeholders on Eskom’s revenue application, as part of its decision-making process. The application can be accessed on the NERSA website at https://www.nersa.org.za/. It is also available on Eskom’s website at https://www.eskom.co.za/about-eskom/nersa/
Eskom is required to submit to the regulator the revenue it requires in order for NERSA to make its determination. Eskom follows the Multi-Year Price Determination (MYPD) methodology as prescribed by NERSA. This methodology is now in its sixth application; hence the process is referred to as MYPD 6.
NERSA will make the decision on the revenue Eskom can receive following its own analysis and the regulator conducting a series of public consultations. This application allows for an improvement in the financial sustainability of Eskom through the migration to cost-reflective prices. This in turn significantly contributes to the successful operation of Generation, Transmission (NTCSA) and Distribution in Eskom. Further migration towards cost reflectivity to cover the full cost of capital would be considered in subsequent applications. This would minimise the impact on the taxpayers.
In accordance with its revenue decision, NERSA will then make tariff decisions for implementation from 1 April 2025. Eskom can only implement tariff decisions made by NERSA.
“We are entering the next phase of the regulatory process where NERSA will conduct an extensive public consultation about Eskom’s revenue application and we urge as many stakeholders as possible to become involved so NERSA can determine a key component in the funding of a constant electricity supply that drives economic growth and our quality of life for years to come,” said Calib Cassim, Chief Financial Officer of Eskom.
“As NERSA makes its decision, it will consider affordability for identified vulnerable sectors including indigent customers and certain industrial sectors. Eskom has made its revenue application based on the costs it will incur to efficiently provide electricity to the customer and it is a critical component in ensuring Eskom continues to provide reliable electricity services while improving its financial sustainability, through a migration to cost-reflective prices,” concluded Cassim.
Key components of Eskom’s Revenue Application:
Eskom is applying for total revenues of R446 billion for FY2026, R495 billion for FY2027, and R537 billion for FY2028.
This translates to:
The proposed average price increases for Eskom direct customers are 36.15% (1 April 2025 to 31 March 2026), 11.81% (1 April 2026 to 31 March 2027) and 9.10% (1 April 2027 to 31 March 2028).
Update on Eskom’s retail tariff plan (RTP) application to NERSA
In addition to the MYPD 6 application, Eskom has submitted a retail tariff plan (RTP) to NERSA outlining proposed structural changes, which are expected to be implemented from 1 April 2025 once all NERSA approval and governance processes are concluded. The RTP aims to introduce cost-representative pricing that supports the long-term sustainability of all participants in the electricity supply industry.
Issued by Eskom Media Desk, 24 September 2024
