High Court dismisses Eskom’s bid to double tariffs

The North Gauteng High Court in Pretoria on Monday rejected state-owned power utility Eskom’s application for urgent relief in a dispute with the National Energy Regulator of South Africa (Nersa) over its 2019-2022 tariff decision.

Last year, the power utility approached the court to have the 2019 decision by the Nersa, which approved increases of 8.10% and 5.22% for the two years set aside.

In papers before court, Eskom held that without these tariff increases it could default on payments to lenders, triggering the immediate payment of its national debt burden of R318 billion, guaranteed by the government.

Judge Jody Kollapen was not convinced that the matter is urgent.

Eskom, which supplies more than 90% of South Africa’s electricity, said Nersa’s decision should be set aside because it incorrectly treated R69 billion of state bailouts when calculating the amount of revenue Eskom should be allowed to recoup via tariffs.

Eskom said in a statement that, while the court dismissed the urgency of the application, it indicated that there was merit in its case.

During court proceedings, Eskom urged that the price of electricity is low, while Nersa believes it’s too high. Eskom maintained it needs Nersa to increase electricity tariffs so it can fulfill its operational obligations. But Nersa expressed electricity consumers won’t be able to afford the increase Eskom is asking for.