- The High Court in South Africa last week ruled that the country’s energy regulator’s decision to approve Johannesburg’s City Power’s electricity tariff application for 2019/20 was irrational, irregular and unlawful.
- The court set aside the approval and ordered the applicants and City Power get together to settle their dispute by mutual agreement.
- Should the parties fail to reach an agreement within 30 days, the matter is referred back to NERSA to redetermine the tariffs.
The applicants which include the Casting, Forging and Machining Cluster of South Africa (CFMC) plus four other business entities, argued that NERSA failed to assess City Power’s cost of supply when it determined the tariffs. In their application they claim that City Power tariff is 41% higher than the equivalent Eskom Direct Tariff.”
Related news: South Africa business chambers take on NERSA over tariff determination
The Gauteng High Court division judge ruled that NERSA not only failed to determine the overall cost of supply, but also the cost of supply to each consumer and was therefore not in a position to assure, as is required, that any cross-subsidies between consumer groups are transparent and reasonable.
Related news: Eskom submits tariff increase to NERSA
Commenting on the ruling, CFMC MD Steve Jardine said the cluster is trying to improve the trading conditions for industry. “It should result in better regulation and force Nersa and municipalities to rethink tariff increases in future. Their conduct so far has clearly been found wanting,” said Jardine.
Author: Bryan Groenendaal
