Eskom has won the court battle against the National Energy Regulator of South Africa (Nersa).
The power utility fought against Nersa to be granted another tariff increase. The court criticized Nersa for their 2018/2019 decision as being “unfair, irrational and unreasonable”.
They have thus set aside Nersa’s tariff decision, stating that it was departing from methodology by which the tariff was determined.
Eskom aimed to use an increase in tariffs to recover R219-billion in revenue from its consumers. However, the increase granted by Nersa means that the public enterprise will only be able to recover R190-billion.
It has 60 days to formally apply to the regulator to have the tariffs officially increased.
The court battle stretches back to from 2019, when Eskom initially requested a 18.91% increase in tariffs, but was only granted a hike of 5.23% by the Energy Regulator.
To determine tariffs, Nersa applies a methodology that calculates Eskom’s costs, depreciation on its assets and return on capital.
The judge agreed with Eskom’s arguments that in the tariff application under question, Nersa had deviated from the methodology in important respects, without informing Eskom beforehand and allowing it an opportunity to be heard.
Although the judgment does not have an immediate impact on electricity tariffs, but it opens up the way for Eskom to make a supplementary tariff application.