South Africa’s Energy Regulator has granted Eskom allowable revenue of R206.38-billion for 2019/20, which will translate into a tariff increase of 9.41% from April 1, exclusive of the 4.41% hike sanctioned following an adjudication, in 2018, of three Eskom regulatory clearing account (RCA) applications.

The State-owned utility is allowed to increase tariffs to direct customers by 13.82% on April 1 it was announced at the National Energy Regulator of South Africa (Nersa’s) Kulawula House head office, in Pretoria, on Thursday.

Increases for municipal customers will follow on July 1, with adjustments to cater for the three-month lag during which municipalities are unable to pass on the higher Eskom tariffs to customers.

The regulator also granted further increases of 8.1% and 5.22% for 2020/21 and 2021/22 respectively, following its adjudication of Eskom’s three-year fourth multiyear price determination (MYPD4) submission. This equates to allowable revenue of R221.843-billion in 2020/21 and R233.078-billion.

The regulator also granted Eskom the right to claw-back R3.869-billion in line with its review of a 2017/18 RCA application, which was adjudicated together with the MYPD4 submission. The liquidation schedule is still top be determined.

In its MYPD4 submission, Eskom requested allowable revenue of R219-billion for 2019/20, rising to R252-billion in 2020/21 and R291-billion in 2021/22, which, if granted, would have translated to increases of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22.

Together with the 4.41% RCA increase, the increase from April 1 would have been 21.5% had the Energy Regulator acceded to Eskom’s full request.

The tariff increases were announced following nationwide public hearings hosted by Nersa during January and February, where stakeholders warned that further hikes would threaten jobs, growth and investment.

Some argued that no increases should be permitted at all until Eskom had cleansed itself of corruption, State capture and inefficiency. Others suggested that the increases be capped at the level of inflation until the utility was restructured for greater sustainability.

The hearings preceded President Cyril Ramaphosa’s announcement in his State of the Nation Address that Eskom would be split into three independent units of generation, transmission and distribution, under Eskom Holdings.

The MYPD4 application, as well as the public hearings, also took place made ahead of Finance Minister Tito Mboweni's announcement that government would be injecting R23-billion-a-year into the utility for a period of up to ten years to help Eskom pay down its debt and to create financial capacity for an increase in plant maintenance.