Energy regulator to oppose Eskom's judicial review of tariffs decision

JOHANNESBURG - The National Energy Regulator of SA (Nersa) will oppose a High Court application that state-owned power company Eskom filed against it, it said on Monday.

Eskom wants the court to review and set aside the regulator's approval of a Regulatory Clearing Account (RCA) balance of  R13.271 billion for the  2018/19 financial year.

The RCA application is a mechanism that allows Eskom to adjust for over- or under-recovery of revenue for a particular year, if there is a notable gap from the initial estimations made when the regulator granted tariffs. The over- or under-recovery is then accounted for in adjustments in future tariffs.

In May 2020, Nersa granted Eskom approval to recover R13.3 billion as part of its RCA application for the 2018/19 year. This was, however, less than Eskom had applied for.

Nersa said its decision to grant the RCA had considered the impact of Eskom's continuous court review applications on the "government's economic recovery plans, as well as hardships on customers."

Eskom and the energy regulator have in recent years been at loggerheads over regulatory issues involving the clawing back of funds, as the power utility seeks higher tariffs to bolster its balance sheet and energy generation efforts.

Last year, Eskom, which is battling high debt levels - and which has been at the centre of corruption allegations - said although it was dealing with claims of corruption relating to state capture, it attributed its liquidity problems to "inadequate tariff increases."

Eskom's debt was last said to be around R488 billion and the company has been fighting to recover debt owed to it by municipalities.

On Monday, the regulator said Eskom's judicial review application was received on April 12, 2021 and it has invited interested parties to join its bid "if they consider that the Court decision may  negatively affect them."