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Nersa hits back at Eskom court bid: We are confident in our decision

Oct 12 2019 11:19
Marelise van der Merwe

The National Energy Regulator of South Africa has responded to Eskom's announcement that approached the North Gauteng High Court to challenge a decision to grant it a lower tariff increase, saying it is confident the decision had a solid basis.

Eskom says Nersa's determination has left it with a shortfall of R102bn. The regulator in March extended tariff increases of 9.41%, 8.1% and 5.22% to Eskom over three years.

The power utility, which is facing some R44bn in debt, had applied for price hikes of 17.1% for 2019/20, 15.4% for 2020/21 and 15.5% for 2021/22. It argued that the tariff hike would help it tackle its mounting debt burden, Fin24 previously reported.

The request for increases was opposed by business, labour and civil society in written and oral submissions to Nersa.

In a statement issued on Friday, Nersa said it had based its decision on the applicable laws and regulations.

"The Energy Regulator approved Eskom’s allowable revenue of R206,380bn for financial year 2019/20, R221,843bn for financial year 2020/21 and R233,078bn for financial year 2021/22," it said.

"In performing its duties NERSA is guided by, amongst others, the Electricity Regulation Act, 2006 (Act No. 4 of 2006) and the regulatory framework. It remains confident that its determination is consistent with the governing legislative and regulatory requirements."

If Eskom was not satisfied with the decision, it added, the power utility was "at liberty" to invoke the National Energy Regulator Act of 2004, which allows for any person to institute proceedings in the High Court for judicial review of any decision made by the energy regulator.

It is not the first time that Eskom has challenged Nersa in court over tariffs. Earlier this year, Eskom launched a court bid to have tariff increases reviewed, Bloomberg reported. 

nersa  |  eskom  |  electricity tariff hikes


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