Power company Eskom said on Wednesday it respected a recent ruling granting the National Energy Regulator of South Africa (NERSA) leave to appeal a July high court decision which allowed the state utility to recoup R69 billion (US$3.9 billion) from consumers over the next three years via higher electricity tariffs.
The July ruling was a win for Eskom which was disputing a decision by NERSA to deduct a R69 billion equity injection from the the government in determining tariffs the company could effect for the 2019/20, 2020/21 and 2021/22 financial years.
NERSA signalled it was appealing that decision in August –even while acknowledging procedural unfairness on its part — saying the high court had effectively substituted the energy regulator’s decision on the latest multi-year price determination (MYPD) on Eskom tariffs with its own.
The judgement “traversed beyond the acceptable principles that allow the court to substitute the decision of NERSA”, it argued.
On Wednesday, Eskom acknowledged high court judge Fayeeza Kathree-Setiloane’s latest ruling in the matter, dated September 28, that NERSA could take its appeal to the Supreme Court where it had “reasonable prospects of success”.
It said its chief financial officer Calib Cassim was in agreement that “this is a matter of significant importance to the country”.
“It would be beneficial for a superior court to provide an order on the recovery of the misappropriated equity,” Eskom added.
“Eskom is committed to a speedy outcome to this process as any further delay in resolving this matter continues to burden the economy of the country. It is hoped that this process will allow for adherence to the relevant legislative and regulatory requirements in the future.”
NERSA uses a multi-year price determination methodology in ascertaining Eskom’s required revenue and this forms the basis on which the regulator evaluates the tariff adjustment applications received from the power utility.
Eskom is saddled with debt of more than R450 billion (US$27 billion) and last year President Cyril Ramaphosa announced the state entity would be separated into three separate generation, transmission and distribution divisions to improve its operational efficiency.