Court rejects Eskom’s bid for urgent tariff hike

Power plant silhouette on evening sky

In handing down the judgment on Monday, judge Jody Kollapen dismissed Eskom’s request for the interim relief.

“The determination of a suitable tariff requires a careful weighing and balancing of factors. The legislature has appointed a specialist body that has the expertise to do precisely that and the court should respect those carefully crafted boundaries,” he said

Eskom asked for the interim relief pending the outcome of the second part of its application, which is yet to be heard, in which it seeks an order reviewing and setting aside a tariff decision made by National Energy Regulator of SA (Nersa) for the three financial years spanning from 2019 to 2022.

In its court papers, Eskom argued that the regulator’s decision had wrongly factored in a R69bn government bailout for the utility and that this was irrational, procedurally unfair and went beyond the regulator’s power.

Eskom said it sought the interim relief of the 16.6% and 16.7% tariff hikes to “stave off the financial crisis to which Nersa has exposed it and the country as a whole”.

The utility argued that the matter was urgent because the budgeting processes of municipalities requiring changes in tariffs must be tabled in parliament before March 15 on any given year to come into effect on July 1.

But according to Kollapen, it “cannot be that the tariff determination for effectively a single year should be elevated to determining the survival or the demise of a significant state-owned entity”.

He said the hearing for part B of the application would be expedited.

steynl@businesslive.co.za

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https://www.businesslive.co.za/bd/national/2020-01-15-nersa-tariff-ruling-puts-the-economy-at-risk-eskom-tells-court/