A South African court told the nation’s energy regulator to review its decision to allow the state-owned power utility to increase prices from 1 April after a group of business people argued the company needed to be more open about its expenses.
The National Energy Regulator, which sets prices Eskom can charge its customers, on 1 March gave the producer permission to recoup expenses it hadn’t budgeted for in fiscal 2014 by raising tariffs by an average of 9,4% starting on 1 April, more than the 8% it had initially allowed.
A group of companies in Port Elizabeth, including light-alloy wheel maker Borbet’s local unit, alleged that the award was unlawful and that the utility should have provided more regular updates on its financial situation, Eskom spokesman Khulu Phasiwe said. The company will await the regulator’s decision on the way forward, it said in an e-mailed statement.
The court on Tuesday said judging price applications isn’t part of its competency and sent the decision back to the regulator, Phasiwe said by phone. “Eskom is studying the judgment of the north Gauteng high court,” he said on his Twitter account.
Eskom, which provides about 90% of the country’s electricity, had to buy diesel to run costly emergency turbines in 2014 and last year to curb regular power cuts in the continent’s most-industrialized economy, where growth has slowed.
Electricity prices in South Africa have almost quadrupled since 2007, when the country first had shortages that resulted in scheduled cuts known as load shedding. The utility has stabilised the performance of its plants and rolled out a cost-cutting program that saved R17,5bn in the year ended 31 March, about a third more than targeted. The producer had wanted to increase prices by 18% in the year that started 1 April.
The regulator is aware of the case, Charles Hlebela, a spokesman for Nersa, said by phone. — (c) 2016 Bloomberg LP
- Reported with assistance from Ana Monteiro