Nersa has powers to determine electricity tariff hikes, not the court - Judge Jody Kollapen
Johannesburg - The National Energy Regulator of South Africa (Nersa) has the sole power and expertise to determine electricity tariff increases and not the courts.
This was the ruling of Judge Jody Kollapen in the North Gauteng High Court in Pretoria on Monday following an urgent application by Eskom asking the court to declare Nersa's decision to grant the power utility an increase of 8.1% as illegal and unlawful.
Eskom had wanted Nersa to grant them a 16.6% increase and the court to endorse it but Judge Kollapen rejected their proposal.
Delivering judgment on Eskom’s interim application, Judge Jody Kollapen said their application will result in an effective electricity increase of close to 17% in April this year as opposed to the 8.1% that Nersa had approved.
“A principled difficulty that arises for the Court is what to make of the almost 17% proposed increase. While Nersa has in its reasons for its decision dealt with the consequences of what an increase of that proportion will have on the economy, employment, electricity sales and inflation, the determination of what an appropriate increase should be ideally left in the hands of the regulator,” Judge Kollapen said.
He rejected Eskom’s request for the court to determine an appropriate tariff increase saying “the principle of the separation of powers militates strongly against the court responding to such invitation to set a tariff.
“The determination of a suitable tariff is a complex matter and requires careful weighing and balancing for a number of factors. The legislature has appointed a specialist body with the necessary expertise to do precisely that and a Court should respect the carefully crafted boundaries of its powers,” the Judge said.
He was adamant that South African courts are not equipped to determine tariff increases.
“Whether an increase of about 17% is consistent with the case advanced, whether it strikes a fair balance between users and licensees and its overall impact on the economy are all complex matters that is for obvious reasons best left to agencies with the necessary expertise,” Judge Kollapen said.