Eskom wins Nersa battle, analyst warns of negative impact on consumers

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Energy analyst Chris Yelland says the judgment by the High Court in Johannesburg regarding Eskom, will have an immensely negative impact on consumers and businesses.

Electricity tariffs are set to increase at no less than 15% from 2021, after Eskom won a court battle against the National Energy Regulator of South Africa (Nersa) over a R69 billion equity injection.

The High Court declared that Nersa’s decision to deduct the equity injection into Eskom from its allowable revenue for the period 2019/2020 to 2021/2022 was illegal.

The court has instructed that the full amount be recovered over the next three years.

Yelland says the Nersa board has had numerous court rulings against its decisions, highlighting its incompetencies.

He says, “This is going to have a very negative impact on consumers, on the person on the street and of course on business and industry as it will result in a 10% per annum increase for the next three years over and above whatever the other increases are…”

“This is an additional increase, it is bad news coming at a bad time when customers are under pressure. The judge says that this shows that Nersa is essentially incompetent. I think it is time for the board really to think about resigning. Do the honourable thing,” added Yalland.

Eskom has welcomed the court ruling, saying it allows the power utility to migrate to a position where it could be self-sufficient and recoup efficient costs.

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