The National Energy Regulator of South Africa (Nersa) says when it approved Eskom’s electricity tariff increases of 18.65% for 2023 and 12.74% for 2024, it considered the plight of the poor. (Delwyn Verasamy/M&G)
The National Energy Regulator of South Africa (Nersa) says when it approved Eskom’s electricity tariff increases of 18.65% for 2023 and 12.74% for 2024, it considered the plight of the poor.
The matter is being heard at the Pretoria high court after the Democratic Alliance (DA) filed papers in January challenging the energy regulator’s decision as well as the state’s response to South Africa’s electricity crisis, including load-shedding.
Nersa — which determines the tariffs the utility charges at a level that allows it to recover revenue for generating electricity — as well Eskom, President Cyril Ramaphosa and other state officials are opposing the DA application.
On Monday advocate Anton Katz, representing the DA, argued that the official opposition party did not want load-shedding itself, but rather the conduct by the government which has led to the current energy crisis, declared unconstitutional.
Addressing the media outside the high court on Monday, DA federal council chairperson Helen Zille said the party was going ahead with its challenge to prevent a further collapse of the economy.
“We have seen load-shedding has caused economic collapse. Economic collapse causes massive unemployment and in that context, the government still sees fit to raise electricity tariffs by 31.4%,” she said.
Zille added that load-shedding and the electricity tariff increases, which are far above inflation, were concerning for South Africans.
“This means that South Africans are forced to pay much more for electricity at a time when millions are unemployed as a result of load-shedding,”
In its court papers, the DA argued that Nersa misinterpreted section 15 (1) (e) of the Electricity Regulation Act and did not take public participation into account when determining the tariffs.
The party wants the Nersa decision declared invalid, and the regulator to be given six months to remedy the situation.
In its response Nersa said the DA’s argument that the energy regulator had not considered the effect of tariff hikes on poor households was incorrect, saying the determination was based on its calculating mechanism as well as a public participation process which considered the consequences the hikes would have on Eskom’s energy producing capacity and the overall effect on consumers.
“It is sufficient that Nersa considered submissions regarding the unaffordability of the proposed tariff, especially for low-income households. In light of these submissions, it was rational for Nersa to act and provide cross-subsidies,” it said.
“The contention that Nersa ignored a relevant consideration, ie, cross-subsidies, rendering the decisions taken irrational, has no merit.”