SOUTH AFRICAN ENERGY REGULATOR TO APPEAL COURT DECISION ON TARIFF HIKE

The National Energy Regulator of South Africa (Nersa) says it will appeal the North Gauteng High Court judgment which set aside the regulator’s decision to grant power utility Eskom a tariff increase.

“Nersa will be appealing the North Gauteng High Court judgment delivered on 16 August 2016 regarding Nersa’s earlier decision on the approval of Eskom’s Multi-Year Price Determination (MYPD 3) Regulatory Clearing Account (RCA) for the 2013/14 financial year,” said the regulator on Thursday.

The decision under review concerns Nersa’s approval of the RCA application for the tariff year 2013/14, which culminated in a 9.4 per cent increase in the average tariff for standard customers for the 2016/17 financial year.

Earlier this month, the High Court here ruled that the correct methodology had not been followed by Eskom when it requested an additional tariff increase.

It has been reported that the applicants who brought the application before the court asked the court to declare as unlawful the 11.2 billion Rand (about 831 million US dollars) Regulatory Clearing Account (RCA) increase to Eskom’s tariff.

“Nersa is of the view that the judgment is flawed. It has also created a hierarchy of issues in the application of the MYPD methodology without considering the objective of the methodology and how the RCA is decided,” the regulator said.

“Therefore, Nersa will be appealing the judgment on the grounds of it being premised on erroneous information, a non-implementable position, as well as its substitution of Nersa’s decision of 2014.”

Nersa believes that the appeal will create certainty with regard to the regulatory framework as there will be an approved tariff in place during the appeal process.

It added: “It will also allow an opportunity to clarify issues raised in the judgment. The option to appeal is considered to be the most effective manner to remedy the situation created by the judgment, while ensuring that regulatory certainty is sustained through the most available legal means without violating the contents of law and judgement.”

Source: NAM NEWS NETWORK