BUSINESS NEWS - Energy regulator Nersa has presented four new options to Eskom for determining the tariffs it will be allowed to charge from 1 April next year, but the utility is persisting with its court application to compel Nersa to process its application according to the existing pricing methodology.
Nersa earlier rejected Eskom’s application, which Moneyweb has learnt is for a 20% increase, because the existing pricing methodology has lapsed.
Eskom says the current methodology has not lapsed, and Nersa’s own internal legal adviser also said it does not lapse unless Nersa replaces it with a new methodology – which it has not done.
Confusion
Instead, Nersa has embarked on a confusing process of public participation about proposed new principles underpinning the methodology, or the new methodology, or the principles used in the application of the existing methodology, depending on which of Nersa’s contradicting pronouncements one relies on.
Against this background it is not clear how Eskom’s new tariffs will be determined.
Current tariffs lapse at the end of March 2022, and in the absence of a lawful determination before that date, Eskom could find itself unable to lawfully charge any tariff.
That would place the burden on the taxpayer to rescue Eskom to the tune of up to R300 billion.
If Nersa follows an alternative process that does not comply with legal prescript, the tariffs will be vulnerable to legal challenge.
The new tariffs have to be tabled in parliament by 15 March every year and must be finalised timeously for municipalities to factor it into their budgets for the new financial year that starts on 1 July.
