Solar and energy storage engineering, procurement and project management contractor Impower Solar urges all stakeholders and interested parties to submit input by January 21 on the National Energy Regulator of South Africa’s consultation paper on State-owned Eskom's allowable revenue.

The public participation process follows successful legal challenges by civil society and industry bodies.

The challenges underscore that previous revenue agreements reached between Nersa and Eskom lacked the necessary transparency and public consultation required for such high-impact economic decisions, says Impower Solar business development manager Matthew Cruise.

“The regulator seems to struggle with its core mandate, namely ensuring electricity remains affordable while holding the power utility accountable for cost management. When major industrial players or specific sectors receive tariff relief, that revenue shortfall is typically recouped from other businesses and households,” he says.

The consultation paper focuses on technical legal and accounting questions rather than simply asking if the increase is acceptable. It effectively asks the public to provide input on how to prevent Eskom from receiving undue compensation across ten specific areas, he explains.

The regulator is currently seeking input on a proposed R76-billion adjustment, which is a significant increase from the R54-billion settlement previously rejected by the High Court.

If the R76-billion adjustment is approved, it is estimated that electricity tariffs could rise by about 10.5% this year, compared with the 5.36% originally projected before the redetermination.

This would contribute to an average yearly increase of about 15% over the past five years. These continuous hikes risk further straining the national economy, he adds.

The R76-billion figure stems largely from a R62-billion shortfall in depreciation and a R14-billion return on assets that Nersa admitted were incorrectly calculated in previous determinations, Cruise says.

“It is concerning that after 15 years of price determinations, the regulator and the utility are still in dispute over fundamental accounting principles like asset depreciation.

“The depreciation in question often relates to power stations where construction costs were significantly higher than originally budgeted. South African consumers are now being asked to cover the accounting consequences of those overruns,” he adds.

However, the timing and nature of the consultation document present challenges for meaningful public engagement, he notes.

The release of a document of this significance on December 30, with a submission deadline of January 21, provides a very narrow window for the public and businesses to respond, says Cruise.