South Africans can expect to pay more for electricity following a ruling by the High Court in Pretoria.
While the judgement won’t have an immediate effect on tariffs, South Africans can expect an increase in the future according to a report by Business Day.
This increase is likely to come after the National Energy Regulator of South Africa’s (Nersa) deliberations about Eskom’s regulatory clearing account (RCA) for 2018/2019. The RCA is a way for Eskom to recuperate costs that it incurred over and above the costs allowed by Nersa in the initial tariff application for a period.
This recuperation often comes in the form of tariff increases.
The judgement which was made yesterday was a rather big on and Judge Jody Kollapen slammed Nersa’s decision to not grant Eskom a 18.91 percent increase.
Instead, Nersa granted Eskom a 5.23 percent increase for 2018/2019.
The judge slammed the methodologies used by Nersa to arrive at the 5.23 percent figure.
This includes Nersa not including Hendrina and Arnot power stations in its determinations, Nersa not using the agreed methodology to determine the cost of coal and Nersa not calculating employee costs in a reasonable manner.
This is just one of three applications Eskom has made in court. Another, also due to be heard in the Pretoria High Court, will challenge Nersa’s treatment of the R69 billion bailout Eskom received. Nersa reportedly said the bailout was revenue and this ultimately reduced the amount Eskom could claim from customers via a tariff increase.[Source – Business Day]