Revision 2 (July 2026): what has changed since our August 2025 summary, and the top three risks for the market

– By Shirley Salvoldi, Energy Corporate Specialist and Robert Futter, Advisory Partner – 18 August 2026

Executive Summary Update

In August 2025, Cresco summarised Eskom’s newly issued Wheeling of Energy and Net-Billing Policy, which replaced the earlier “Reconciliation of Accounts for Eskom Customers Receiving Energy from non-Eskom Generators” framework. Eskom has since reissued the policy as Revision 2 (July 2026). The core architecture is unchanged – wheeling, net-billing (offset) and gen-purchase transactions are still reconciled through the same account-adjustment mechanism – but several of the “not yet in effect” and “future” provisions flagged in our original article have now moved, and one significant protection for existing contracts has been removed.

What Has Changed Since Our August 2025 Summary

• Grandfathering removed: the August 2025 policy held that existing monthly-reconciliation contracts would continue to be honoured if Eskom moved to hourly TOU, unless a customer opted in. Revision 2 now states that once Eskom’s automated system is implemented, hourly reconciliation “will apply to all existing and new contracts” – there is no grandfathering and no opt-in.
• Forecast-deviation penalty dropped: the explicit ±5% threshold on wheeled-energy volumes against the required three-year forecast, and its associated (not-yet-active) penalty, no longer appears in the current policy text.
• Debt restriction dropped: the prior blanket restriction on contracting for wheeling or offset with customers or generators in payment arrears is likewise absent from the current text.
• Everything else holds: eligibility, own-use netting, voltage requirements, MEC treatment, the network-charge stack payable by offtakers, and the 24-hour allocation-change cut-off are all carried forward substantively unchanged.

Top Three Risks for the Market

Drawing on Cresco’s recent work assessing wheeling power purchase agreements against this policy, three risks stand out as the ones the market most needs to price in – not because they are new in isolation, but because Revision 2 has sharpened each of them.

1. Reconciliation certainty for existing contracts has weakened

Removing the grandfathering language means every wheeling contract signed under the monthly-reconciliation regime is now, in principle, exposed to a future switch to hourly or half-hourly TOU settlement – with no contractual carve-out in the policy itself. Generators, traders and offtakers with existing agreements should not assume the commercial basis they contracted on is permanent. In practice, full implementation is unlikely before roughly 2029, given the billing-system rework, processing capacity, and the two dependent NERSA approvals (an updated gen-wheeling tariff, and an explicit WEPS credit) Eskom still needs – but the direction of travel has changed, and migrating any existing “grandfathered” deal will itself require Eskom to satisfy NERSA that the move is in the public interest and does not raise tariffs generally.

“It will probably only be implementable by 2029.”

— Rob Futter, Advisory Partner, Cresco

“Eskom can’t simply switch existing contracts onto hourly reconciliation – it will have to satisfy NERSA that doing so is in the public interest and doesn’t add cost to the wider tariff base.”

— Shirley Salvoldi, Energy Corporate Specialist, Cresco

2. Many PPAs do not clearly capture an Eskom policy change as a cost trigger

Cresco’s review of current wheeling PPAs found real variation in how – or whether – a change to Eskom’s own wheeling policy is treated as a pricing or cost-recovery trigger. Some agreements expressly capture “any amendment to the Network Operator’s wheeling policy” as a qualifying event; others rely on a general Change in Law definition anchored to action by a regulator or “Competent Authority,” which may not clearly reach an internal Eskom Distribution policy change absent a specific NERSA act/rule or a NERSA approved tariff change which incorporates moving to hourly reconciliation. Where that gap exists, a party could be left bearing the cost of a reconciliation-method change, a loss-factor change, or a tariff restructuring it has no clear mechanism to recover or renegotiate. If this is done through a change to the Gen-wheeling and Gen-offset tariffs, this will have to go through a consultation process and the impact on customers will need to be shown

3. Take-or-pay exposure meets a tightening operational window

Offtakers typically remain liable for contracted wheeled volumes even where actual demand does not materialise, and Revision 2 does not soften this. The 24-hour allocation-change cut-off, the absence of clear guidance on Maximum Export Capacity exceedance consequences, and the still-undeveloped mechanics of portfolio and virtual wheeling all narrow the margin for error between what is contracted and what is actually consumed or generated. Parties should look for – or negotiate in – a genuine, proactive notice mechanism for anticipated demand shortfalls, rather than relying solely on force majeure or network-event relief, which typically only responds after the fact.

Closing Observation

Revision 2 confirms that Eskom’s wheeling and net-billing framework is still actively evolving, not settling. The removal of the grandfathering protection is the single most consequential change for existing contracts, and it raises the practical stakes on getting the Change in Law/Change in Costs drafting right in every wheeling PPA under negotiation now.

Cresco recommends that parties currently contracting review their pricing and volume commitments with this transition in mind – including, where appropriate, more conservative contracted volumes or a split between monthly- and hourly-ready pricing profiles – rather than assuming today’s reconciliation basis will hold for the life of the contract.

Disclaimer

This article has been prepared by Cresco, using the information available to Cresco at the time of writing, and based on Cresco’s assessment of that information. Cresco is released from any liability in respect of any inaccuracies or omissions arising from information not available to it. To the extent this article attempts to predict future matters, Cresco has used its reasonable endeavours and is released from any liability in respect of those future matters. Readers shall not rely on Cresco’s predictions and shall form their own assessment. Copyright of this document rests with Cresco. All rights reserved. Copying of this information, in whole or in part, is prohibited without prior written permission.