# Eskom challenges latest power tariff decision in court

- Link: https://dearsouthafrica.co.za/2019/10/11/eskom-challenges-latest-power-tariff-decision-in-court/
- Published: 2019-10-11T11:12:21+02:00
- Author: dearSA

![](https://cdn.dearsouthafrica.co.za/wp-content/uploads/2019/08/20191258/Screenshot-
2019-08-20T171845.629.png "tariff increases")

JOHANNESBURG – South Africa’s struggling power utility Eskom said on Friday it was
challenging in court the regulator’s latest tariff decision, a move it said was 
necessary to avert financial disaster.

State-owned Eskom, which produces more than 90% of the country’s electricity, implemented
some of most severe power cuts in several years this year and is reliant on government
bailouts to survive.

In March, regulator Nersa granted Eskom tariff increases of 9.4%, 8.1% and 5.2% 
over the next three years, far below what the utility had sought. At the time Eskom
said the tariff awards left it with a projected revenue shortfall of around 100 
billion rand ($6.7 billion).

Eskom said in a statement on Friday its board of directors had decided to challenge
the tariff awards after reviewing the reasons for Nersa’s decision.

“We have put in an application for urgent interim relief, which is necessary to 
avoid financial disaster for Eskom. We are seeking an order to address this shortfall
in a phased manner,” Eskom Chief Financial Officer Calib Cassim was quoted as saying.

In arriving at its decision, Nersa had offset a 23 billion rand a year bailout granted
by government against Eskom’s allowable return on assets, Eskom said, arguing that
approach ran counter to Nersa’s own methodology and defeated the whole point of 
the bailout.

Eskom’s finances are hobbled by its massive 450 billion rand debt burden, racked
up partly to pay for two mammoth coal-fired power stations, Medupi and Kusile. But
Eskom also argues its financial position has been severely damaged by years of low
tariff awards which have not allowed it to recover its costs.

[Article](https://www.iol.co.za/business-report/energy/watch-eskom-challenges-latest-power-tariff-decision-in-court-34660265)
by IOL