Eskom awaits regulator's decision

© gui junpeng – 123RF.com

“Eskom notes the judgment by the Gauteng High Court on the (Regulatory Clearing Account (RCA) and will await a decision on the way forward by the National Energy Regulator of South Africa,” said Eskom in a brief statement.

This as the South Gauteng High Court on Tuesday, 16 August, ruled that the correct methodology had not been followed by Eskom when it requested an additional tariff increase.

It has been reported that applicants who brought the application before the court, asked the court that the R11.2bn Regulatory Clearing Account (RCA) increase to Eskom’s tariff to be declared unlawful.

In March Nersa granted the power utility a 9.4% tariff increase for the 2016/17 financial year. This increase became effective from 1 April and applied to Eskom’s direct customers. Tariffs for municipal customers were effective from July 1.

The tariff increase was granted after Eskom submitted its RCA application for the first year of the Third Multi-Year Price Determination (MYPD3).

At the time of its decision Nersa said the RCA balance of R11.2bn is recoverable from standard tariff customers, local Special Pricing Agreements (SPAs) and international customers. It also decided that the amount of R10.2 billion is recoverable from standard tariff customers for the 2016/17 financial year only.

Nersa said it was studying and analysing the ruling.

“Once Nersa has thoroughly examined the judgment by the High Court, it will take a position on the matter, which will then be communicated in due course,” said the regulator on Wednesday.