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Court sets aside Eskom tariff hike

Aug 16 2016 19:21
Paul Burkhardt

Johannesburg - The National Energy Regulator must review its decision to allow Eskom to increase prices from April 1, the High Court in Johannesburg ruled on Tuesday.

This after a group of businesspeople argued Eskom needed to be more open about its expenses.

The National Energy Regulator, which sets prices Eskom can charge its customers, on March 1 gave the producer permission to recoup expenses it hadn’t budgeted for in fiscal 2014 by raising tariffs an average 9.4% starting April 1, more than the 8% it had initially allowed.

A group of companies in Port Elizabeth, including light-alloy wheelmaker Borbet SA’s local unit, alleged that the award was unlawful and that the utility should have provided more regular updates on its financial situation, Eskom spokesperson Khulu Phasiwe said.

The court on Tuesday said judging price applications isn’t part of its competency and sent the decision back to the regulator, Phasiwe said by phone.

Eskom is studying the judgment, he said on his Twitter account.

Power cuts

Eskom, which provides about 90% of the country’s electricity, had to buy diesel to run costly emergency turbines in 2014 and last year to curb regular power cuts in the continent’s most-industrialized economy, where growth has slowed.

Electricity prices in South Africa have almost quadrupled since 2007, when the country first had shortages that resulted in scheduled cuts known as load shedding.

The utility has stabilised the performance of its plants and rolled out a cost-cutting program that saved R17.5bn in the year ended March 31, about a third more than targeted. The producer had wanted to increase prices by 18 percent in the year that started April 1.

The regulator is aware of the case, Charles Hlebela, a spokesperson for Nersa, said by phone.

Read Fin24's top stories trending on Twitter:

nersa  |  eskom  |  electricity  |  tariff increases


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