HILARY JOFFE: Eskom sees off Nersa, now it must tackle big cost items
Taking on the vested interests and the rent-seeking
It would have been laughable if the sums involved hadn't been so serious. Last February, finance minister Tito Mboweni gave Eskom a R69bn equity injection over a three-year period to help bail it out of its financial crisis. Last March, Eskom's regulator took the money away, deducting it from the revenue it allowed the power utility in calculating electricity tariffs over the three years. Last week, the Johannesburg high court threw out the National Electricity Regulator's (Nersa's) decision. It ordered it to give back the money and commented, scathingly, on the regulator's incompetence, given that this was the third time the courts had found that Nersa had got it wrong on tariffs.
The ruling will add almost 10 percentage points to next year's electricity tariff increases, with more to come. Eskom has welcomed that the courts insisted, essentially, that Nersa - which even before the case had conceded the principle that it could not treat an equity injection as a subsidy - must...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.