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Cape Town - The court ruling setting aside a portion of the 9.4% tariff electricity increase is a big win for businesses and consumers, said the Nelson Mandela Bay Business Chamber.
The Chamber was one of the applicants that argued in court papers that the tariff hike was unlawful.
The national energy regulator (Nersa) announced the hike on March 1 this year. The increase, effective from April 1, applied to Eskom’s direct customers. Tariffs for municipal customers were effective from July 1.
In the application, which was heard in the North Gauteng High Court, the applicants asked for the R11.2bn regulatory clearing account (RCA) increase to the Eskom tariff to be declared unlawful and set aside based on numerous irregularities in the approval process.
It noted that Eskom should have provided more regular updates on its financial situation as outlined in the RCA.
The 63-page ruling handed down by Judge Cynthia Pretorius on Tuesday stated that neither Eskom nor Nersa complied with the prescribed methodology for interim tariff increases.
"[T]he decision by Nersa was irrational, unfair and unlawful and should be set aside", she said.
I have not the slightest doubt #Eskom & #Nersa will appeal judgement all way to Concourt. The admin nightmare is too ghastly to contemplate!
— Chris Yelland (@chrisyelland) August 16, 2016
“We are very satisfied with the outcome of the judgment as this is a massive win not only for businesses in Nelson Mandela Bay, but for all electricity consumers in the country," said Nelson Mandela Bay Business Chamber deputy president MC Botha.
He added that the Business Chamber’s legal representation was in the process of studying the detailed judgment and would keep members informed on the full implications of the judgment in due course.
Eskom and Nersa said that it will study the judgment before taking a decision on the way forward.
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