Defeat for Nersa as court orders regulator to decide Eskom’s 2022/23 tariff

The Pretoria High Court ruled in favour of Eskom in its bid to have the National Energy Regulator of South Africa’s (Nersa’s) decision to reject the power utility’s 2022/23 revenue application set aside as unlawful.

In a statement released on Friday, Eskom confirmed that Judge Jody Kollapen ordered Nersa to adjudicate on Eskom’s electricity tariff application by February next year.

Kollapen ruled that this must be adjudicated in line with the multi-year pricing determination (MYPD) methodology published in 2016.

The court also ruled that the methodology remains valid, until replaced by an alternative process.

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“The decision by the high court comes as a relief as it will contribute to the stability of the electricity industry and thereby the economy of the country,” Eskom’s general manager for regulation, Hasha Tlhotlhalemaje said.

The judgment was granted to Eskom in terms of Part A of its court bid.

Eskom also seeks an order reviewing and setting aside the decision of Nersa to reject its tariff application for 2023/24 as well as 2025 in Part B of its application.

This application is yet to be heard, according to Fin24.

Eskom had approached Nersa on 2 June this year, however, the energy regulator rejected the power utility’s application.

Nersa’s rejection was on the basis that the methodology used by Eskom to calculate its allowable revenue was applicable for the MYPD4 period, which would end on 30 March 2022, and could not be used for a determination after this date.

READ MORE: Nersa’s plan would see households pay much more, says Eskom

Meanwhile, Kollapen in his order also set out a timetable for the determination of the 2023/23 tariff, which states that:

• Nersa must publish Eskom’s MYPD5 revenue application on 8 December 2021
• Representations on Eskom’s MYPD5 revenue application be made by 14 January 2022
• Nersa must hold public hearings on Eskom’s MYPD5 revenue application between 17-21 January
• The regulator must make a final decision on Eskom’s application by 25 February.

The power utility had requested that the ruling be made before 15 December in order to allow Nersa enough time to conclude the public hearings relating to the implementation of revised tariffs and prices.

This will be implemented on 1 April 2022 for non-municipal customers and on 1 July for municipal customers.