Eskom’s bid for bigger tariffs rejected by South African court

Eskom’s urgent bid for larger electricity tariff increases has been rejected by the Pretoria High Court in a fresh setback for the cash-strapped South African power utility.

The utility lodged an urgent application with the court for a tariff increase of 16.6% from April and a rise of 16.7% from April 2021 to compensate for what it says is an error by energy regulator, Nersa.

On Monday, the court ruled that the utility had failed to prove that its dispute with Nersa was urgent, meaning that Eskom will now likely face months of court hearings as it argues its case with the regulator.

Eskom believes Nersa miscalculated its tariffs for the financial years beginning in 2019 to 2021 by treating 4.8 billion of bailouts which the utility has been promised as revenue.

Last year, Nersa set Eskom’s tariff rises at 9.4% for 2019/20, 8.1% for 2020/21 and 5.2% for 2021/22

Eskom supplies more than 90% of South Africa’s electricity but is struggling with high debts and power stations in need of refurbishment.

It has been forced to impose several rounds of severe power cuts in the past year that have dented the country’s economic growth.

 “The judge indicated that ‘Nersa violated the basic principle of accounting by treating an equity injection as revenue’,” Eskom declared in a statement regarding the ruling.

Nersa will comment after it has studied the judgment, a spokesman said.

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