Outa to 'urgently' challenge Eskom tariff hike

Cape Town - The Organisation Undoing Tax Abuse (Outa) on Saturday said that it had no other choice but to obtain an interdict against an increase in electricity tariffs on April 1 2016.

"After various unfruitful requests by Outa and other parties, to receive the written reasons from Nersa (National Energy Regulator of SA) for its decision to permit Eskom to implement a 9.4% electricity tariff increase, the organisation has been left with no choice but to approach the North Gauteng High Court," Outa said in a statement.

In its answer to requests Nersa declined to provide details around the decisions that gave rise to the higher tariff, according to Outa.

Nersa cited possible "confidential" information which it must first clear with Eskom, before they are allowed to release parts of the information to the public.

"These answers will in all likelihood only come to the fore well after the electricity tariff increases have been implemented, well outside the period the public is able to assess and comment on validity of the reasons for their decision," Outa said.

The group has decided to approach the North Gauteng High Court in an attempt to obtain an interdict against the implementation of the increase.

“As matters stand now, we will be in court on the 31st of March for the application for an interdict to be heard. We have concerns regarding the lack of transparency and manner in which Nersa arrived at their decision to approve the tariff.

"We simply had to react and challenge Nersa's approval of the increase, and Eskom's implementation thereof, whilst the public is being left in the dark as to why this has been approved,” said Ivan Herselman, Director of Legal Affairs at Outa.

In Januray Nersa held public hearings on Eskom's application for the evaluation and approval of the regulatory clearing account (RCA) balance for the financial year 2013/2014 of the third multi-year price determination (MYPD3).

The RCA process reconciles variances between the actual costs that Eskom incurred in 2013/2014 financial year in the production of electricity and the MYPD3 record of decision by Nersa.

Eskom has submitted an RCA application to recover R22.8bn, which it said is driven substantially by revenue under-recoveries, higher expenditure on coal burn, independent power producers (IPPs), open cycle gas turbines and other primary energy costs.

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