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Eastern Cape businesses challenge Nersa's R11.2 billion increase

Judgement was reserved today [Wednesday, 15 June] in what could be a watershed case with far-reaching consequences for electricity pricing in South Africa.

A case in the North Gauteng High Court was brought by a group of four Nelson Mandela Bay businesses, and the Nelson Mandela Bay Business Chamber as a fifth applicant, to set aside the additional electricity increases that took effect in April this year.

The Eastern Cape businesses challenged the National Energy Regulator of South Africa (Nersa)’s decision to approve an additional R11.2-billion increase for Eskom through the Regulatory Clearing Account (RCA).

The argument by the energy intensive Nelson Mandela Bay businesses was that Nersa did not comply with the methodology when it approved Eskom’s application and that the decision was unlawful, irrational, and procedurally unfair.

The court case took place over two days and was heard by Judge Cynthia Pretorius.

Advocate David Unterhalter SC represented the applicants, Dennis Fine SC was arguing for Nersa, while Jeremy Gauntlett SC represented Eskom. 

Should judgement be in favour of the applicants, the Eastern Cape businesses asked the court to provide a just and equitable remedy that will serve two considerations:

• ensuring that there are no undue disruptions to the provision and pricing of electricity, and
• ensuring that consumers who have overpaid receive just and equitable relief.

Eskom has already undertaken to repay amounts overpaid following the April increase if Nersa’s decision is declared unlawful and set aside by the court.

The Nelson Mandela Bay Business Chamber has over the past year positioned itself as the authoritative voice of business on pertinent issues of the cost, quality and security of supply of electricity in South Africa and the city of Nelson Mandela Bay. 

As one of the prominent business chambers in South Africa we pride ourselves on taking the lead in lobbying on behalf of our 700 members on issues affecting the sustainability of our member companies.

Judgement on the matter is expected in the next four weeks