Eskom Tariff Battle with NERSA not Urgent

  • Eskom acknowledges the High Court judgement handed down in the North Gauteng High Court this morning in relation to its application for an urgent relief on the case it brought against the National Energy Regulator of South Africa (NERSA)
  • Eskom is seeking the court to review and set aside NERSA’s decision on its multi-year tariff price determination (MYPD 4).
  • The court has decided that the matter is not urgent but the merits of the R69bn will still be heard as Part B of the review process.

Calib Cassim, Eskom’s Chief Financial Officer says, “We understand and respect the decision of the Court and will follow its guidance on the matter. Our case had two parts, the first (Part A) where we were asking that the matter is heard urgently in order to enable Eskom to receive and implement a tariff decision before the beginning of the financial year in April 2020 and the second (Part B), which is the hearing of the matter itself where Eskom is challenging the regulator’s decision on its treatment of the shareholder equity in its MYPD 4 decision”.

“At the root of the matter is the fact that we do not agree with NERSA’s deduction of the R23 billion that we received from the shareholder, treating it as revenue. We are therefore encouraged by the fact that while the judgement says the matter is not urgent, it was indicated that there is merit in our case. The judge indicated that‘NERSA violated the basic principle of accounting by treating an equity injection as revenue’. He continued to say ‘the reasonable judgement that NERSA is allowed to exercise cannot translate into an open ended discretion that insulates it from scrutiny and judicial review…it must accordingly be arguable that the decision by NERSA in its treatment of the R23 billion equity is open to review and possible attack’. We will await the next phase of the court case in order to finalise the recovery of the equity provided by Government that we believe was incorrectly deducted,” ended Cassim.”

Eskom has noted that the Court has indicated that it will assist with expediting the hearing of Part B of their application.

Author: Bryan Groenendaal

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