MYPD3 Hearings Over Next Two Weeks

Department of Energy

Public hearings on Eskom’s third multi-year price determination (MYPD3) application will be held over the next two weeks throughout the country.

In a statement, the energy department called on all sectors of the South African economy to participate in the hearings.

Eskom has applied for an average price increase of 16% for each of the five years of the MYPD3 from 2013/14 to 2017/18.

The national energy regulator (NERSA) has to approve the application in accordance with the Electricity Regulation Act of 2006.

According to NERSA, the MYPD3 process is intended to:

•    ensure Eskom’s sustainability as a business and limit the risk of excess or inadequate returns, while providing incentives for new investment;
•    ensure reasonable tariff stability and smoothed changes over time in line with the government’s socio-economic objectives;
•    appropriately allocate commercial risk between Eskom and its customers;
•    provide efficiency incentives without leading to unintended consequences of regulation on performance;
•    provide a systematic basis for revenue/tariff setting; and
•    ensure consistency between price control periods.

The hearings kicked off in Cape Town on Tuesday 15 January 2013 and will conclude in Midrand on 31 January.

A call has also gone out for written submissions for those who cannot make it to the respective hearings.

For the first time Eskom has asked for a five year period for the MYPD. Previous determinations have been confined to a three year period.

The final decision on the MYPD3 by NERSA has to be tabled in parliament by the middle of March 2013.

MYPD2 expires at the end of March 2013.

Sabinet Cape Town Office