Transmission infrastructure stands at an electricity substation in Pretoria, South Africa, on Friday, May 31, 2019. While South African President Cyril Ramaphosa says power utility Eskom Holdings SOC Ltd. is considered too big to fail, it could be too big to support because of the costs associated with stabilizing its finances, Engineering News reported, citing S&P Global Ratings Director Ravi Bhatia. Photographer: Waldo Swiegers/Bloomberg

Brace yourself for tariff hikes as Eskom wins court battle against Nersa

Debt-stricken Eskom won a High Court ruling against energy regulator Nersa, which blocked the utility from recovering some costs it says it incurred in 2019.

Published on:

10 Mar 2020, 4:07 pm

By Antony Sguazzin

(Bloomberg) – Eskom, South Africa's indebted power utility, won a High Court ruling against the nation's energy regulator, which had blocked the company from recovering some costs it says it incurred during the 2019 financial year.

Eskom had asked the National Energy Regulator of South Africa for an 18.9% tariff increase to allow it to generate R219.5bn ($13.8bn) of revenue. Yet Nersa only allowed for R190.3bn of income, saying the power company should make up the difference by cutting costs.

The High Court in Pretoria said that Nersa had made errors in its determination, according to a copy of the ruling. Eskom has 60 days to apply to the regulator to increase the tariffs it can charge customers and the regulator must pay Eskom's costs, the ruling said.

Eskom, which has R454bn in debt, is struggling to cover its costs and pay for adequate maintenance to avoid regular power cuts.

Eskom

NERSA

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Brace yourself for tariff hikes as Eskom wins court battle against Nersa

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