High Court Rules Out Eskom’s Tariff Increase


The High Court in Johannesburg has ruled out some of  the tariff increase granted to South African electricity public utility, Eskom this year, saying the power utility had not followed the regulator’s rules and method in doing so.

The high court made this rule ordering the National Energy Regulator to review its decision to allow Eskom to hike prices from 1 April. The court ruling followed a group of businesses who argued that Eskom needed to be more open about its expenses.

The National Energy Regulator (Nersa) had in March this year, supported Eskom’s tariff increase by 9.4 percent as a way of recouping the utility’s unbudgeted expenses used  for running expensive diesel generators to keep the lights on in the country.

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To this, a group of companies in Port Elizabeth, including light-alloy wheelmaker Borbet SA’s local unit, stood out against the award saying it was unlawful and that the utility should have provided more regular updates on its financial situation.

And on Tuesday, the high court said judging price applications aren’t part of its competency. It then sent the decision back to the regulator for a review.

According to the court ruling, except Eskom or Nersa appeals the decision, Eskom is not permitted to continue to charge customers the tariff increase, and will have to revert to the 3.4% tariff increase in 2015. It would also mean it would have to refund customers the difference since the tariff came into effect on April 1.

Had the court not done this, electricity tariffs would have risen by 3.5 percent from April 1.

Eskom however noted the court judgment “and will await a decision on the way forward by Nersa. On the other hand, Nersa’s regulator member for electricity Thembani Bukula said the regulator had not yet had an opportunity to study the judgment.

The High court action by the various parties signals that civil society intends to keep closer vigilance on the regulator procedures.

Meanwhile, Public Protector Thuli Madonsela has cleared the air on Eskom’s right on power disconnection. She said that the utility does have the right to disconnect electricity when tampering is suspected, but it must be done in a reasonable, lawful and procedurally fair manner.

In the Public Protector’s provisional report titled, “Who tampered?”, which has been leaked to the media before its final release, Public Protector Thuli Madonsela said that Eskom failed to exercise its power and responsibility to disconnect illegal or unauthorized consumption of electricity by failing to follow due process.

“Eskom does have the right to disconnect electricity in instances where tampering is suspected,” she said. “However, such power should be exercised in a reasonable, lawful and procedurally fair manner and in this instance, is not.”

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She therefore ordered  Eskom to immediately reconnect the Khumalo house in Khayelitsha in Cape Town, reverse its R12 000 tampering fine and determine a fair amount for the family to pay for the two years they did not pay.