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Cape Town - The Organisation Undoing Tax Abuse (Outa) on Tuesday said that it would proceed with its court application to prevent an Eskom electricity tariff hike, which takes effect on Friday, April 1.
Outa on Saturday said that it would obtain an interdict against the increase as "Nersa declined to provide details around the decisions that gave rise to the higher tariff".
Outa feared that the answers would only come to the fore well after the 9.4% electricity tariff increase had been implemented and well outside the period the public was able to assess and comment on the validity of the reasons for their decision.
In the meantime, Nersa released a 27-page report stating its reasons for granting the tariff hike.
Nersa's move could render the Outa court application redundant with energy expert Chris Yelland tweeting "Nersa pre-empts Outa application for urgent court interdict by publishing its reasons for decision to allow Eskom 9.4% price increase".
Outa director of legal affairs Ivan Herselman told Fin24 that the organisation would still go to court to delay the implementation of the tariff hike until Outa and the public has had time to analyse the decision.
"Once the horse has bolted the tariff cannot be undone...a review of the tariff at a later stage will not give the public sufficient recourse as it is highly unlikely that they would be able to recoup the costs of the difference between the new tariff and the old tariff if the decision is set aside," he said.
In a summary of its decision Nersa said that the the Regulatory Clearing Account (RCA) balance of R11.241bn would be recoverable from standard tariff customers, local Special Pricing Agreements (SPAs) and international customers in the financial year 2016/17.
"The amount of R10.257bn would be recoverable from standard tariff customers for the 2016/17 financial year only; the average tariff for standard tariff customers increased by 9.4% for the 2016/17 financial year only; the amount of R983m be recoverable from Eskom’s local SPA customers and international customers for the 2016/17 financial year only; and Eskom must submit a new Multi Year Price Determination (MYPD) application, within three months, based on revised assumptions and forecasts that reflect the recent circumstances," the report said.
Outa has contracted ex-Eskom executive Ted Blom to analyse the report.
