South Africa: Court Questions Nersa's Competence and Credibility As an Energy Regulator

analysis

The High Court in Johannesburg had tough words for Nersa and suggested that South Africa's energy regulator cannot do its job, judging from how it determined electricity tariffs that Eskom could charge consumers over four years from 2019. It is good news for Eskom, but bad news for Eskom customers, who will now face tariff increases of just under 10%.

The competence of SA's energy regulator, the National Energy Regulator of SA (Nersa) to determine and control electricity prices that Eskom can charge consumers has been called into question by the high court.

The National Energy Regulator of SA (Nersa) has a mandate of approving electricity tariffs charged by Eskom under the Electricity Regulation Act. Nersa also regulates the revenue that the state-owned power utility generates to recover costs from generating, transmitting and distributing electricity to consumers.

But the high court had tough words for Nersa and suggested that the regulator cannot do its job, judging from how it incorrectly determined electricity tariffs that Eskom could charge consumers over four years from 2019.

Judge Fayeeza Kathree-Setiloane of the High Court in Johannesburg said on Tuesday 28 July in her ruling about a dispute between Eskom and Nersa on tariffs:

"Nersa...

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