Gas users lose bid to review Sasol’s max price methods - Nersa

Cape Town – A High Court ruling on October 4 in favour of energy regulator Nersa means its maximum price methodology remains valid for Sasol’s maximum gas prices and trading margin, it said on Tuesday in a statement

The North Gauteng High Court dismissed the review application by seven members of the Gas Users Group (PG Group, SAB, Consol Glass, Nampak, Mondi, Illovo Sugar and  Distribution and Warehousing Network) against Nersa and Sasol Gas.

The application was filed after Nersa on 26 March 2013 approved Sasol’s application for maximum prices of gas and a gas trading margin for the period 26 March 2014 to 30 June 2017.

In processing this application, Nersa applied its maximum price methodology, which was approved by Nersa in October 2011 subsequent to a due public consultation process.

After the approval of Sasol’s application, the applicants brought an application for the review of Nersa’s two decisions of 26 March 2013 to approve Sasol’s maximum price application and to approve Sasol’s application for gas transmission tariffs, as well as for the review of Nersa’s maximum price methodology if it is found to constitute a reviewable decision.

However, On October 4, the court said that because of regulation 4(3) of the Piped-Gas Regulations, Nersa is required to use the methodology on a consistent and comparable basis when approving the maximum prices of gas, according to Nersa.

“Nersa had the statutory duty to lay down the maximum price methodology and was not free to abandon this methodology when making its maximum price decision on Sasol’s applications.

“Therefore, the maximum price methodology does constitute a reviewable decision. However, the court further held that the application to review the maximum price methodology almost two years after the methodology was approved is per se unreasonable, and that the applicants have not set out the facts that prevented them from taking the Methodology on review timeously.

“Subsequently, the court dismissed the applicants’ review application with costs,” said Nersa.

Nersa’s full-time regulator member for piped-gas, Nomfundo Maseti said Nersa will continue to implement the current methodology, as well as monitor and enforce compliance with its decisions.