DA files high court challenge to pending electricity price increase

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The Democratic Alliance has filed papers in the Pretoria high court challenging the decision by the National Energy Regulator of South Africa (Nersa) to approve an Eskom tariff increase of 18.65% for 2023 and 12.74% for 2024.

The DA’s application is two-fold. In the first part, it seeks an interdict barring Eskom from implementing the price increase on 1 April pending the outcome of the second, in which it asks the court to declare not only the price hike but the state’s response to the power crisis, including load-shedding, as unconstitutional.

In a founding affidavit, DA leader John Steenhuisen said Nersa had abandoned its earlier policy of compelling Eskom to subsidise electricity by charging below-cost tariff and the effect of a cumulative increase of more than 30% over the two years would be to rob poorer consumers of the right to access the energy source.

The price hikes would apply to mining houses and indigent households alike, he stressed.

“Nersa’s decision means that on 1 April 2023, people will no longer have access to electricity, when on 31 March 2023 those people had that access,” Steenhuisen said.

The DA said Nersa’s decision rested on the flawed rationale that the increase would help Eskom to recover its financial footing and provide customers with a secure energy supply.

“This premise is false,” it said. “Eskom cannot be saved by an increase in tariffs. Without significant structural reform, Eskom is a lost cause that cannot be saved or in any way assisted by making electricity customers pay more.” 

Approving the increase was irrational, the party said, because the regulator had failed to consider its impact on vulnerable persons, or to take measures to ensure that those reliant on the subsidy could continue to access power.

In support of its applicant for an interdict, it argued that consumers would suffer irreparable harm if it were denied, whereas the loss Eskom would suffer could be remedied, if the second part of the court challenge failed, by backdating the tariff increase.

The court papers list the constitutional rights violated by load-shedding as including those to dignity, security, freedom of trade and access to food, education and health care. 

“Without any doubt, load-shedding thus undermines a substantial suite of constitutional rights,” the DA said, adding that the courts have repeatedly acknowledged that limited access to electricity compromised these rights.

The papers in this regard echo a letter of demand sent to the minister of public enterprises and the chief executive of Eskom by Houghton-based law firm Mabuza Attorneys days ago.

In this letter, seven would-be litigants including the United Democratic Movement and Build One South Africa movement, threatened to file suit on Monday unless load-shedding is halted by Friday or, failing that, the government provide a full explanation why this cannot be achieved immediately, along with a timetable to indicate when it would stop.

In its papers, the DA argued that Nersa’s decision constituted administrative action and was thus reviewable under the Promotion of Administrative Justice Act. In the alternative, it could be challenged under the principle of legality as an exercise in public power.

The grounds for review were that the decision was socially regressive, that the administrative process leading to it was flawed and that it was irrational because Nersa could only authorise increases to help the utility recover revenue if it were financially sustainable.

Differently put, the DA said, since tariff increases will not avert Eskom’s demise, and the government has no other plan to save the entity, there was no point in extracting additional revenue from consumers.

“Nersa would effectively licence sucking customers’ money into a black hole. But this is exactly what Nersa has done in this case.”

The DA has cited Eskom as the second respondent, President Cyril Ramaphosa as the third, followed by a number of cabinet members, first among them Public Enterprises Minister Pravin Gordhan.