By Lehlohonolo Lehana.
Eskom over the weekend declared war on Nersa and approached the courts on an urgent basis after the rejection of its multi-year price determination 5 (MYPD5) application covering the 2022/23, 2023/24 and 2024/25 periods, while Nersa changed horses midstream in terms of the application process, which means Eskom has no tariff structure for April next year until the court rules on the matter.
This as Nersa rejected Eskom’s multi-year electricity tariff increase application at the end of September.
On Monday (18 October), the power utility said it had filed an application in the High Court to review Nersa’s decision to reject the tariff increase, citing the move as its only option.
“Regrettably, this is 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,” Eskom said.
At the end of September, Nersa announced that it had rejected Eskom’s price application and had published a consultation paper on principles to be used when determining pricing.
“The new price determination approach will also take into consideration the rapid transformation of South Africa’s electricity sector, respond to the transformation of the Electricity Industry and associated energy security concerns, rising electricity prices as well as the increase in self and private sector electricity generation,” Nersa said at the time.
Nersa responded late on Monday with a statement on Eskom’s salvo, saying that it was reviewing the application and would resolve the matter in the legal time frame.
Media Statement – Eskom’s High Court Application to review MYPD 5 decision. pic.twitter.com/nmAS9D3Okj
— NERSA_ZA (@NERSA_ZA) October 18, 2021
Now Eskom says Nersa’s approach to price determination is ‘impossible’ to apply.
“Nersa requires Eskom to make a new application based on a methodology yet to be developed. This is impossible both from a legal process and timing point of view. It is hoped that Nersa will respond in a manner that allows for the stability of the country’s economy and the electricity industry,” the power utility said.
Eskom now wants to press for a determination on the 2022 application process for continuity, while it normally applies for a three to five-year determination to cut the red tape while applying for the longer-term decision.