Borbet SA (Pty) Ltd and Others v National Energy Regulator of South Africa and Others (24364/2016) [2016] ZAGPPHC 702 (16 August 2016)

Borbet SA (Pty) Ltd and Others v National Energy Regulator of South Africa and Others (24364/2016) [2016] ZAGPPHC 702 (16 August 2016)

The court found that NERSA failed to comply with the temporal and procedural requirements of the MYPD methodology by allowing Eskom to submit its RCA application for the 2013/2014 tariff year more than a year after audited financial statements were available, without providing quarterly updates or proper alerts to customers as required. This non-compliance undermined the purpose of the methodology, which is to provide predictability and transparency to consumers and businesses regarding future tariff adjustments. NERSA did not inform affected parties of its intention to deviate from the methodology, nor did it provide reasons for such deviation prior to the decision, thereby violating...

Citation
[2016] ZAGPPHC 702
Parties
Applicant: Borbet SA (Pty) Ltd; Applicant: PG Group (Pty) Ltd t/a Shatterprufe; Applicant: Crown Chickens (Pty) Ltd; Applicant: Agni Steels SA (Pty) Ltd; Applicant: Autocast South Africa (Pty) Ltd t/a Autocast Port Elizabeth; Applicant: Nelson Mandela Bay Business Chamber; Respondent: National Energy Regulator of South Africa; Respondent: Eskom Holdings SOC Ltd; Respondent: Minister of Energy; Respondent: Nelson Mandela Bay Municipality; Respondent: South African Local Government Association
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
16 August 2016
Case Number
24364/2016
Procedural Posture
Review Application / Judgment After Hearing
Outcome
Application granted. NERSA's decision is reviewed, set aside, and remitted for reconsideration in accordance with the MYPD methodology.
Judges
C Pretorius
Legal Topics
Promotion of Administrative Justice Act, Electricity Tariff Regulation, Procedural Fairness, Legitimate Expectation, Efficiency Testing
Administrative Law Civil Procedure Promotion of Administrative Justice Act Electricity Tariff Regulation Procedural Fairness Legitimate Expectation Efficiency Testing

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Parties

Borbet SA (Pty) Ltd

Applicant

PG Group (Pty) Ltd t/a Shatterprufe

Applicant

Crown Chickens (Pty) Ltd

Applicant

Agni Steels SA (Pty) Ltd

Applicant

Autocast South Africa (Pty) Ltd t/a Autocast Port Elizabeth

Applicant

Nelson Mandela Bay Business Chamber

Applicant

National Energy Regulator of South Africa

Respondent

Eskom Holdings SOC Ltd

Respondent

Minister of Energy

Respondent

Nelson Mandela Bay Municipality

Respondent

South African Local Government Association

Respondent

Procedural Posture

Review Application / Judgment After Hearing

Legal Issues

  1. 1 Whether NERSA's decision to approve Eskom's RCA application for 2013/2014 was lawful, rational and procedurally fair.
  2. 2 Whether NERSA complied with the temporal and procedural requirements of the MYPD methodology.
  3. 3 Whether NERSA properly tested the efficiency of Eskom's costs in the RCA application.

Ratio Decidendi

The court found that NERSA failed to comply with the temporal and procedural requirements of the MYPD methodology by allowing Eskom to submit its RCA application for the 2013/2014 tariff year more than a year after audited financial statements were available, without providing quarterly updates or proper alerts to customers as required. This non-compliance undermined the purpose of the methodology, which is to provide predictability and transparency to consumers and businesses regarding future tariff adjustments. NERSA did not inform affected parties of its intention to deviate from the methodology, nor did it provide reasons for such deviation prior to the decision, thereby violating...

Court Disposition

Application granted. NERSA's decision is reviewed, set aside, and remitted for reconsideration in accordance with the MYPD methodology.

Orders

  • The decision published by the first respondent on 1 March 2016 in relation to the Regulatory Clearing Account application by the second respondent – third Multi Year Price Determination (MYPD3) Year 1 (2013/2014) is reviewed, set aside and remitted to the first respondent.
  • All future RCA applications by the second respondent in relation to the MYPD3 must be submitted and evaluated in accordance with paragraph 14 of the MYPD3 Methodology, or any future amendment thereof.