The National Energy Regulator of South Africa (Nersa) is battling it out in court with power utility Eskom over the price of electricity. This head-on collision is mainly due to Eskom saying the price of electricity is low, whilst Nersa believes it’s too high.
The tariffs stand-off played out in the North Gauteng High Court on Monday.
Eskom says it needs Nersa to increase electricity tariffs so it can fulfill its operational obligations. But Nersa says electricity consumers won’t be able to afford the increase Eskom is asking for.
The cash-strapped power utility is bitter about Nersa’s decision to deduct R23 billion from the R69 billion government bailout it got from National Treasury last year.
General Manager of Regulations at Eskom, Hasha Tlhotlhalemaje says they are concerned that as a regulator, Nersa isn’t ensuring Eskom is viable.
“This is the second court application between Eskom and Nersa and in this instance, Eskom is trying to clarify the Nersa decision that was made on the 2019/20 financial year were an increase of 5.2% was granted.”
“The main focus of this application is that Nersa did not follow the regulations, the legislation and its own methodology arriving in its decision and they are detailing the various areas where Nersa has not applied its methodology. And also highlighting the evidence that shows that Nersa made an immature decision and decided to change it. We are concerned because Nersa is required to ensure the sustainability of Eskom and we’re not seeing much evidence to that effect,” expressed Tlhotlhalemaje.
During arguments, senior counsel Matthew Chaskalso, representing Eskom, highlighted that Nersa hasn’t done its homework where tariffs are concerned.
“Nersa adopted an approach of punishing Eskom for failing to meet cost projections as opposed to examining them which was not an applicable approach to adopt. What Nersa did is make two mistakes in disallowing costs that should be covered through tariffs”
Eskom says that the low tariffs are partly to blame for load shedding.
Arguments continue on Tuesday with counsel for Nersa presenting their case.
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