Energy expert Chris Yelland says the decision by the High Court in Pretoria on Friday is a stern disapproval of the National Energy Regulator of South Africa(Nersa) for not following its own methodology.
This after the High Court in Pretoria found that Nersa’s decision to consider municipalities’ applications for electricity tariff increases, without the required cost studies, is unlawful and invalid.
According to AfriForum, this means that the regulator may not consider any applications for electricity tariff increases from municipalities unless the required cost studies are also submitted.
Nersa, however, approved the tariff hike applications set to take effect from Monday, July 1, 2024, despite AfriForum launching urgent legal action against the regulator earlier this month to block the price hikes.
Yelland says, “The court has ruled that there is no proper linkage between the cost of supply and the tariffs you applied and therefore the tariffs you’re asking for are a thumb suck. The courts have also said that this is unlawful because it is not in line with Nersa’s methodology. A very strange thing about all of this is that Nersa approves all these applications that did not follow Nersa’s own methodology, and if the municipality doesn’t follow the methodology of Nersa, then why does Nersa approve their price increases? Nersa should have actually sent their applications back and requested a cost of supply study.”
PODCAST | Energy expert Chris Yelland’s full interview on SAfm’s Weekend View:
