Nersa and Eskom win appeal over interim tariff increase | Fin24
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Nersa and Eskom win appeal over interim tariff increase

Jun 06 2017 15:23
Fin24 and Bloomberg

Cape Town - The Supreme Court of Appeal on Tuesday upheld an appeal by energy regulator Nersa and Eskom, setting aside a high court judgment which had originally set set aside an interim tariff increase in 2016.

Eskom no longer has to pay back a part of the 9.6% additional tariff increase that Nersa approved in 2016.

It means that Regulatory Clearing Account applications have to be considered, former acting Eskom CEO Matshela Koko tweeted on Tuesday. “The rule of law indeed works in SA.”

The high court in Johannesburg had ruled in August 2016 that Nersa must review its decision to allow Eskom to increase prices from April 1, after a group of businesspeople argued Eskom needed to be more open about its expenses.

Nersa, which sets prices Eskom can charge its customers, gave the power utility permission to recoup expenses it hadn’t budgeted for in fiscal 2014 by raising tariffs an average 9.4% starting April 1 2016, 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 had to buy diesel to run costly emergency turbines in 2014 and 2015 to curb regular power cuts in the continent’s most-industrialised economy, where growth has slowed.

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

Eskom is now proposing a 19.9% tariff increase, which would take effect on April 1 2018 if approved by Nersa.

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