South Africa Court Rules Eskom Can Recover 10 Billion Rand in Tariffs

The Komati coal-fired power station, operated by Eskom Holdings SOC Ltd., in Mpumalanga, South Africa, on Tuesday, Jan. 12, 2021. In South Africa, for decades almost all the electricity needed to power Africa’s most industrialized economy has been produced by a fleet of aging coal-fired plants constructed alongside the mines to the east of Johannesburg. Photographer: Waldo Swiegers/Bloomberg

(Bloomberg) --South Africa’s High Court ruled that Eskom Holdings SOC Ltd. can recover 10 billion rand ($681 million) from consumers, enabling the state power utility to raise electricity tariffs by 16%.

By Paul Burkhardt
Feb 16, 2021, 6:48 PM – Updated on Feb 16, 2021, 8:10 PM
Word Count: 208

The ruling comes after Eskom and the National Energy Regulator of South Africa reached an agreement on the matter, the regulator said in an emailed statement Tuesday. It comes as Nersa appeals a ruling in July 2020 that enables Eskom to boost revenue by 69 billion rand over the next three years.

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The court order allows Eskom to recover costs incurred for the production of electricity, the utility said in a statement. It allows the tariff increase to be implemented from April 1, it said.

Raising prices “will place further pressure on the disposable income of especially the middle-income groups, but it will also result in more pain for industrial and retail businesses,” said Elize Kruger, an independent economist.

Eskom is struggling under 464 billion rand of debt and has repeatedly said that electricity tariffs do not reflect its costs. The utility and the regulator, which sets electricity prices, have taken multiple disputes to court.

© 2021 Bloomberg L.P.


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