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CAPE TOWN - Eskom said it will take action, only after the National Energy Regulator of South Africa has justified the reasons for the 5.23% tariff increase.

Eskom's deputy spokesperson, Dikatso Mothae told Fin24 that they are awaiting for the regulator’s reasons for the decision to determine what impact it will have on the business and then decide on the way forward.

It is believed that Eskom was considering a court review of the Nersa's decision.

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Nersa caught Eskom by surprise when it rejected the 19.9% proposed tariff increase. 

The energy regulator substantiated that it followed due regulatory processes in considering Eskom’s revenue application for 2018/19 before it took its decision.

Eskom's  release of interim financial results had to be postponed in December 2017, as it claimed it had to review the impact of the 5.23% price increase as well as to allow the newly-appointed board members sufficient time to review the financials.

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"Eskom is assessing the impact of the lower than anticipated tariff increase for the 2018/19 financial year approved by the National Energy Regulator of South Africa (Nersa) last week Friday. Nersa approved an allowable revenue of R190 billion, resulting in an average percentage price increase of 5.23% against Eskom’s request for an average standard price increase of 19.9%," Eskom announcement read.

Eskom said it is within rights to challenge Nersa's decision, considering the National Energy Regulator Act.

In June 2017, Eskom said the major reason for the need for a whopping 19.9% tariff increase, is to make up for its own sales projections made earlier, which were not realised.

The Organisation Undoing Tax Abuse, however, slammed this reasoning, saying Eskom’s own false projections did not give them the licence to punish the consumer.

It is understood that If the 19.9% tariff increase is approved, municipalities could then in turn increase electricity to consumers by up to 27%. 

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