Part 1 Revenue Application: Multi-Year Price Determination ... - Eskom

2 THE MYPD PROCESS
Key points
Overview of Multi-Year Price Determination
2013/14–2017/18 (MYPD 3)
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This application covers Eskom‟s revenue needs for MYPD 3, which begins on 1
April 2013 and is proposed to run until 31 March 2018.
The MYPD process is supported by a range of policies and legislation, some of
which are in the process of being reviewed, including the MYPD 3 regulatory
rules being reviewed by Nersa.
As part of the application process, Eskom sent a proposed MYPD 3 application
to the National Treasury and the South African Local Government Association
(Salga) for comment. Their responses are outlined in this chapter and have been
considered in the final application.
2.1 Basis of application
Electricity prices are regulated by Nersa in terms of the Electricity Regulation Act. Nersa
determines the revenue to which Eskom is entitled, which is in turn translated into an
average price adjustment and, finally, the tariffs that customers are charged for electricity.
The current three-year price determination, MYPD 2, ends on 31 March 2013. This
application is for the next period, MYPD 3, which commences on 1 April 2013 and will run
until 31 March 2018 if Eskom‟s five-year proposal is accepted.
In keeping with the requirements of Section 42 of the MFMA, Eskom submitted a proposed
MYPD 3 application to the National Treasury and Salga for their comment on 18 June 2012.
Their comments were considered and taken into account in finalising this application. A
summary of their responses appears at the end of this chapter. This application will now be
submitted to Nersa for a determination. Before making its decision, Nersa will follow a public
participation process to solicit stakeholders‟ views on the application.