Eskom stopped from hiking electricity prices for now

Eskom has lost its application for urgent relief against an electricity tariff increase decision by the National Energy Regulator of South Africa (Nersa).

The Regulator previously granted Eskom an increase of 8.1% for the financial year ending April 2021, and 5.2% for the following year, much less than the 16.6% and 16.7% Eskom had asked for.

Eskom approached the North Gauteng High Court to urgently review and set aside Nersa’s decision, but the court determined that the matter was not urgent.

The ruling means that Eskom will not be able to implement the requested tariff increases at the beginning of April 2020.

Not the end of the matter

Eskom’s Chief Financial Officer Calib Cassim said that the utility understands and respects the decision of the court on Part A of its application, but pointed out that Part B still had to be heard.

“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,” Cassim stated.

The court did indicate that there were merits for Eskom’s case on these grounds, as the judge in the matter said: “Nersa violated the basic principle of accounting by treating an equity injection 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,” Cassim said.

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Eskom stopped from hiking electricity prices for now