High Court rules Eskom can recover R10bn through tariff raise

By Paul Burkhardt

(Bloomberg) – South Africa’s High Court ruled that Eskom can recover R10bn ($681m) from consumers, enabling the state power utility to raise electricity tariffs by 16%.

The ruling comes after Eskom and the National Energy Regulator of South Africa reached an agreement on the matter, the regulator said in an emailed statement Tuesday. It comes as Nersa appeals a ruling in July 2020 that enables Eskom to boost revenue by R69bn over the next three years.

The court order allows Eskom to recover costs incurred for the production of electricity, the utility said in a statement. It allows the tariff increase to be implemented from April 1, it said.

Raising prices ‘will place further pressure on the disposable income of especially the middle-income groups, but it will also result in more pain for industrial and retail businesses,’ said Elize Kruger, an independent economist.

Eskom is struggling under R464bn of debt and has repeatedly said that electricity tariffs do not reflect its costs. The utility and the regulator, which sets electricity prices, have taken multiple disputes to court.