By Lehlohonolo Lehana.
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.
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.
Nersa, which released a consultation paper on a possible new methodology on September 24, argues that the current methodology has not provided price stability and that a new approach is also required considering changes under way in the electricity supply industry, including the impending unbundling of Eskom.
The utility has agreed to participate in the review but has argued that it is “simply impossible” for it to make a fresh application on the basis of a yet-to-be-determined methodology in time for a decision to be tabled in Parliament by March 15, as would be required for such a decision to be lawful.
“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.
The power utility 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”.
Eskom has asked for the matter to be treated with urgency, and that a hearing date of no later than December 1 be set so that there is time, following any judgment, for Nersa to publish its application for public comment by no later than December 17.