Eskom: Nersa can press on with tariff hikes

Cape Town - Eskom is of the view that National Energy Regulator of South Africa (Nersa) can go ahead and consider the power utility's application for tariff increases for the financial years ending 2016 and 2017.

This followed the Supreme Court of Appeal ruling on Tuesday, which upheld the appeal of Nersa and Eskom against a number of private companies within the Nelson Mandela Bay Metropolitan Municipality. It related to the adjudication by Nersa of Regulatory Clearing Account (RCA) adjustment application made by Eskom in March 2016.

READ: Nersa and Eskom win appeal over interim tariff increase

Eskom said in a statement that it welcomes the judgment in that it creates the regulatory certainty in how our tariff is determined, which it said is a key concern of rating agencies and investors alike.

“The court considered whether in applying the price adjustment methodology (known as the MYPD), the decision by Nersa was rational, and whether the adjudication process and decision was unfair,” said Eskom’s head of legal Suzanne Daniels.  

READ: Eskom seeks 19.9% tariff increase – report

“The court held that the development of the methodology does not preclude Nersa from applying reasonable judgement on Eskom’s revenue after due consideration of what may be in the best interests of the South African economy and public.”
 
Eskom noted that it's interpretation of this ruling means that Nersa, in applying its discretion, may now consider the remaining RCA applications submitted by Eskom for financial years ending 2016 and 2017, which have been pending since the adverse judgment of the High Court that was handed down in August 2016.

"We will await Nersa’s guidance in this regard."

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