JOHANNESBURG– Eskom, South Africa’s State-owned power utility, says it is confident that the national energy regulator, Nersa, will approve its application a tariff increase yielding an additional 66 billion Rand (about 5.48 billion US dollars) in revenue.

The power utility is trying to recover the money to offset a shortfall in revenue it lost between 2014 and 2017. The public hearings on the request for tariff increases will begin in Western Cape Province and end in Gauteng Province in May.

A Constitutional Court ruling in August 2017 has cleared the way for Nersa to process three Eskom tariff hike applications, Eskom General Manager Hasha Tlhotlhalemaje told a media briefing in Johannesburg Thursday.

This deals with the risk managing process in comparing what Nersa’s decision was and what actually happened and the variances that occurred to various factors, including the change in the (electricity) sales volume, the price of crude oil, the price of coal, etc. So, this is not additional costs that Eskom is incurring, but rather variances that had occurred that Nersa had already decided on.

Nersa is to decide how much money Eskom needs. The power utility says the amount will be spread over a period of three to five years. Nersa will make an announcement on its decision in June.

Eskom estimates that the increases, if approved, will not be more than 3.0 per cent per annum. It has also cautioned consumers to note the VAT increase will impact on their electricity bill starting at the end of April.

We do respect that this is a large amount of money because it’s for a three-year period and this was delayed due to particular court processes. But Eskom is cognizant of the methodology of the phasing out of this prudent cost. There was already a lower decision that was made and this is the recovery of the previous decision, says Tlhotlhalemaje.