Eskom wins court ruling to increase electricity costs

The High Court reviewed and set aside a decision by the National Energy Regulator of South Africa (NERSA) to deduct a R69-billion equity injection from the power utility's allowable revenue for the current three-year period.

The R69 billion over the next three years was allocated to Eskom in the 2019 Budget to assist in its debt.

Eskom says in a statement, the ruling will allow it to "migrate towards a situation where it could become more self-sufficient and be in a position to recover efficient costs and reduce its dependence for further equity support from the Government."

Eskom Chief Financial Officer, Calib Cassim, says the judgement that has been delivered is very encouraging.

"It aids in instilling confidence in the regulatory regime within the country, by ensuring that the NERSA methodology is adhered to.

This Judgement will assist Eskom in paving the way forward towards financial sustainability.” says Cassim. 

He adds that certain vulnerable sectors of the economy, poor residential customers and certain industrial sectors will require special consideration.

"Various measures are already in place to protect the poor. In addition, Eskom has been participating, under the leadership of the Department of

Mineral Resources and Energy (DMRE), in proposals where certain vulnerable economic sectors would be considered for targeted support,"

says Cassim.

He says Eskom will work with NERSA in implementing the outcome of the Court decision.

In reaction to Tuesday’s High court ruling, Nersa says that if left uncontested, the ruling will disrupt the industry and further suppress economic recovery.

"The judgement follows NERSA's acknowledgement of procedural unfairness in the MYPD4 decision concerning the inclusion of the R23 billion Government grant without allowing Eskom to submit its representation in line with the National Energy Regulator Act, 2004 (Act No. 40 of 2004), read with the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000)," reads the statement.

" This case was not merely a case between Eskom and NERSA, but rather a case of Eskom versus the South African economy and electricity consumers. NERSA is currently studying the judgement and will advise on the way forward in due course," says the Nersa statement.

ALSO READ