Bad news for court case against 33.8% electricity price hike

The North Gauteng High Court in Pretoria has dismissed legal challenges calling for a review of two years’ electricity price hikes approved by the National Energy Regulator of South Africa (Nersa).

The Democratic Alliance and South African Local Government Association (SALGA) took the regulator to court over its fifth Multi-Year Price Determination decision (MYPD5).

The DA argued that Nersa had misinterpreted the Electricity Regulation Act and failed to take public comment into account when granting Eskom an effective 33.8% increase in electricity tariffs over two financial years — 2023/2024 and 2024/2025 — in January 2023.

The first tariff increase of 18.65% already came into effect on 1 April 2023 for direct customers and 1 July 2023 for municipal users.

Direct users will be slapped with the second 12.74% hike from 1 April 2024, followed by municipal consumers from 1 July 2024.

The overall result will be that electricity will be 33.8% more expensive after both increases.

The DA wanted the MYPD5 decision declared invalid and suspended while giving Nersa six months to remedy the situation.

In addition, the party sought that the court declare the need to increase electricity tariffs exponentially was due to the ruling ANC government’s failure to take expert advice, plan, or take action to meet the country’s electricity needs.

“We seek a declaration from the court confirming that this failure is due to government and state failure, which failed to take responsibility for defending constitutional rights,” said DA Federal Council chairperson Helen Zille.

“This failure is inconsistent with the Constitution.”

Zille said that once the court declaration was made, the DA wanted a Special Master to be appointed to oversee, regulate, monitor, and report to the court on the government’s progress in implementing the Energy Action Plan that is supposed to deal with the crisis and related issues.

Helen Zille, DA Federal Council chairperson

SALGA also rejected the increases following consultations with municipalities, arguing that they were irrational and that certain considerations were not taken into account in making the decision.

Municipalities were particularly concerned about their ability to purchase bulk electricity at the new tariffs.

SALGA warned that the hikes would push municipal customers to alternative energy, negatively affecting municipal revenue.

However, the court’s ruling on 1 December 2023 found in favour of Nersa.

After considering the “detailed and extensive reasons furnished by Nersa” compared to the attacks on its decision, the court found that none of the review grounds passed muster.

“All relevant factors have properly and in detail been considered, the conclusions reached were neither arbitrary nor irrational and the issue of cross-subsidisation was considered at the appropriate stage,” the judgment stated.

“The High Court, therefore, found that both the review applications of the DA and SALGA must fail.”

Nersa welcomed the ruling in a statement on Friday, 8 December 2023, and added it would study the judgment in full.

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Bad news for court case against 33.8% electricity price hike