Africa-Press – South-Africa. Those “aggrieved” by the upcoming 18.65% electricity tariff hike will have to lodge a court application to challenge the energy regulator’s decision, power utility Eskom has said.
This comes days after President Cyril Ramaphosa told delegates at the ANC Free State provincial conference that he asked the power utility to halt the tariff hike amid ongoing load shedding. The tariff is set to kick in April.
Responding to questions from News24, Eskom indicated that the National Energy Regulator of South Africa (Nersa) is the only authority in the country that can set the price that consumers can be charged for electricity. Nersa also follows an “exhaustive” public participation process to get input from different stakeholders and considers the costs that Eskom will incur before deciding on the final outcome.
Nersa allows for Eskom to recover “efficient costs,” said Eskom. These relate to commitments such as coal contracts, Independent Power Producer Contracts, diesel purchases, the implementation of maintenance, employee contracts, and debt commitments.
“If Eskom does not recover from the consumer, then the burden on the taxpayer increases. Thus efficient costs will need to be recovered – they do not just disappear,” the power utility said.
It added that the only route open to challenge Nersa’s decision is to launch an application with a high court to review and set aside the regulator’s determination.
UJ Professor Hartmut Winkler, who focuses on energy matters, similarly highlighted Nersa’s role in setting the electricity price. He argued that if Eskom were not to implement the tariff hike, there would need to be a trade-off such that government provide some support to make up for the shortfall the utility faces.
Winkler warned that if Eskom adheres to the president’s request, it will set a precedent where in future a president could intervene again and ask for a price increase to be delayed.
Peter Attard Montalto, managing director of Intellidex, does not think that Eskom would follow through with the president’s request.
“There are huge downsides to this kind of populist interference from the very top – including director delinquency, a large VAT hike to pay for more bailouts and destroying credibility around user pays [principle]. All this means the president’s request is unlikely to be listened to despite the hints from the board,” he said.
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