Eskom launches urgent court bid after Nersa rejects price application

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Eskom se Kendal-kragstasie naby Delmas.  Foto: Bloomberg
Eskom se Kendal-kragstasie naby Delmas. Foto: Bloomberg
  • Eskom said it has initiated a court bid to review the National Energy Regulator of South Africa's rejection of its of its price determination application.
  • Eskom said the urgent High Court review requires Nersa to urgently process the Eskom revenue application for at least one year.
  • Earlier this year, the High Court ruled that Nersa may not deduct a R69 billion cash injection from Eskom's allowable revenue.


Eskom announced on Sunday morning that the power utility has initiated proceedings in the South Gauteng High Court in Johannesburg to review a decision by the National Energy Regulator of South Africa (Nersa) to reject Eskom's Multi Year Price Determination (MYPD) 5 application.

The announcement is yet another chapter in the saga between the power utility and the energy regulator as Eskom seeks means to increase its revenue after years of financial, operational and governance challenges.

In September, Nersa rejected an application by Eskom for the financial years 2022/23, 2023/24 and 2024/25. Over the course of the past decade, electricity prices have more than doubled, increasing 175%, while Eskom sales declined by nearly 15% over the same period.

Earlier this year, the High Court ruled that Nersa may not deduct a R69 billion cash injection from Eskom's allowable revenue. This paved the was for the power utility to apply for higher tariffs.

In a statement released by the utility on Sunday, Eskom said a court review was the only available option to avoid extremely serious and negative consequences for Eskom and by necessary consequence to National Treasury.

"The urgent High Court review requires Nersa to urgently process the Eskom revenue application for at least one year, as required by law. The proposed timeframe allows for a decision to be made in time for implementation by 1 April 2022," the Eskom statement said.

Eskom said since it submitted its revenue application to Nersa in June, the application is for implementation from April next year.

"The revenue application was made in accordance with the prevailing methodology, as approved by Nersa. This methodology remains valid, until replaced by an alternate. On 30 September 2021, Nersa rejected the Eskom MYPD 5 revenue application and requires Eskom to make a new application based on a methodology yet to be developed," Eskom said.

Eskom said the current time constraint was "impossible" and that the power utility anticipates a response from Nersa "that allows for the stability of the country's economy and the electricity industry".

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