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Court dismisses Outa challenge to Eskom tariff hike

Lobby group down, but not Outa.

Eskom’s electricity tariffs will, as planned, increase by an average of 9.4% on April 1 after the Organisation Against Tax Abuse (Outa) lost its court bid to have the increase suspended. 

The North Gauteng High Court dismissed the urgent application with cost hours before the increase would take effect. Reasons for the decisions will be handed down on April 8.

Outa director of legal services Ivan Herselman, said while it is never nice to lose, the lobby group will most probably bring an application at a later stage to have the Nersa decision to grant Eskom the increase reviewed and set aside.

Herselman said there are many indications that all is not as it should be and Outa will investigate, get more information and challenge Eskom and Nersa where necessary.

Outa, which was initially formed to fight against Gauteng’s e-tolls, is building up a team that will focus on energy issues, Herselman said.

The court earlier on Thursday granted an order that will see the Nersa decision reviewed by mid-June as a result of another application by a group of businesses in Port Elizabeth.

This businesses, including the Nelson Mandela Bay Business Chamber, also challenged the decision, but reached an agreement with Eskom and Nersa that was made an order of the court on Thursday morning.

In terms of the order, Eskom will proceed to apply for the 9.4% increase by midnight. Should the court in June rule that the Nersa decision should be set aside, the additional 9.4% electricity revenue collected since April 1 would be clawed back.

Outa, however, was not prepared to withdraw its urgent application to the same court to have the tariff increase suspended for 30 days on the same terms and therefore its hearing proceeded.

Outa asked for the increase to be suspended for 30 days, but also indicated that it would accept a ten-day suspension. It argued that the suspension would enable the organisation to study the reasons upon which Nersa based its decision in order to consider bringing a review application.

Eskom and Nersa argued that such a suspension would cause Eskom irreparable harm as it would not be able to implement any other tariff as the increased tariffs replaced the existing tariff. In the absence of a lawful tariff Eskom would have to forgo all electricity revenue for the duration of the suspension, the court was told.

Outa based its application for the suspension on its interpretation of Section 10 of the National Energy Regulator Act. The reasons for the decision should be published at the same time as the decision. The decision was published on March 1 and the reasons only followed 28 days later.

The declaratory order Outa applied for in this regard was dismissed as well as its application for an interdict against the implementation of the increase based on that interpretation.

Herselman said Outa is further preparing applications in terms of the Public Access to Information Act (PAIA), to get more detail about Eskom’s coal, diesel and transport supply contracts.

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