Court rejects Eskom-Nersa settlement

A BEHIND-CLOSED-DOORS settlement between Eskom and the National Energy Regulator of South Africa (Nersa), which would have cost consumers approximately R54 billion, was slammed by the Gauteng High Court, Pretoria.

- ZELDA VENTER

The court not only refused to make the settlement an order of court but said it is untenable that such a decision could be made without public participation.

The settlement endeavoured to correct an error in Eskom’s allowable revenue determination. The judgment, issued on Sunday, followed Eskom’s original court application for a review of Nersa’s decision regarding Eskom’s Multi-Year Price Determination (MYPD) application tariff. However, the application turned into an agreement, which would have allowed Eskom to increase electricity tariffs by almost 9% annually, thereby recovering an additional R54bn from overburdened consumers.

Eskom subsequently asked the court to endorse the R54 billion settlement by making it an order of court to render it lawful. But Judge Jan Swanepoel refused, and he remitted the matter back to Nersa, with the order that the public must be consulted before a final determination is made.