Share

Judgment reserved as Eskom takes Nersa to court over tariff increase

accreditation
Eskom's head office. Picture: Reuters
Eskom's head office. Picture: Reuters

Judgment was reserved in the case involving struggling state utility Eskom, which took a dispute with energy regulator Nersa to court on Wednesday, arguing that the regulator’s three-year tariff decision last year was flawed and threatened the power firm with financial disaster.

Eskom supplies more than 90% of South Africa’s electricity but struggles to keep the lights on and is dependent on government bailouts to stay solvent.

Eskom has asked the high court for an order allowing it to impose a tariff increase of 16.6% from April 2020 and 16.7% from April 2021, according to an affidavit seen by Reuters.

It argues that Nersa’s tariff decision for the 2019-2022 financial years should be set aside because the regulator incorrectly treated R69 billion of state bailouts when calculating the amount of revenue Eskom should be allowed to recoup via tariffs.

Nersa last year awarded Eskom average annual tariff increases of 9.4%, 8.1% and 5.2%, far below the annual increases of around 15% Eskom had applied for.

In its answering affidavit, Nersa said its decision carefully weighed Eskom’s sustainability, what consumers could afford and the impact on the economy.

It argues that granting Eskom the bailout money as allowable revenue would have resulted in excess returns in the three-year tariff window.

Judgment was reserved and it was not immediately clear when the court would deliver a ruling. – Reuters


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Voting Booth
Do you believe that the various planned marches against load shedding will prompt government to bring solutions and resolve the power crisis?
Please select an option Oops! Something went wrong, please try again later.
Results
Yes
20% - 103 votes
No
80% - 403 votes
Vote