National 17.8.2016 01:02 pm

Nersa studies court decision to squash tariff hike

Picture courtesy.

Picture courtesy.

Eskom’s tariff hike was set aside on the grounds that Nersa’s rules and methodology had not been properly applied.

The National Energy Regulator (Nersa) on Tuesday said it was currently studying and analysing the court ruling on its decision earlier this year to grant Eskom a 9.4% electricity tariff hike for 2016.

The North Gauteng High Court on Tuesday set aside a decision by Nersa regarding Eskom’s Regulatory Clearing Account (RCA) application for the first year of the Third Multi-Year Price Determination (MYPD3) period 2013/14 financial year, a process that Nersa uses to determine electricity prices over a number of years.

The decision was set aside on the grounds that the regulator’s rules and methodology had not been properly applied.

Nersa acting spokesperson Wanda Langenhoven told the African News Agency (ANA) that Nersa was busy analysing the judgement and that it would make a determination at its own time, as none had been imposed by the court.

Langenhoven refused to be drawn to comment on whether or not Eskom would have to refund customers the difference since the tariff increases came into effect on April 1 this year.

“Once Nersa has thoroughly examined the judgement by the High Court, it will take a position on the matter, which will then be communicated in due course,” Langenhoven said in a statement.

On Tuesday, Eskom noted the court judgement and said it would await a decision on the way forward by Nersa.

Though Eskom’s RCA application was for the 2013/14 year, it only came into effect on April 1 this year as the application was delayed.

Eskom had applied for a 16.6% increase and argued that its current deficit, for which the additional tariff revenue was needed, arose from being forced to use expensive fuel for its gas turbines to keep the lights on.

Nersa did not grant Eskom the R22.8 billion variance it had requested for the costs incurred in the production of electricity in the 2013/14 financial year.

Instead, Nersa approved an amount of R11.24 billion, which amounted to a 9.4% tariff increase for the 2016/17 financial year.

– African News Agency (ANA)

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