The Constitutional Court has refused an application by several Eastern Cape businesses for leave to appeal a Supreme Court of Appeal (SCA) ruling relating to implementation of the Regulatory Clearing Account (RCA) mechanism in South Africa’s multiyear price determination (MYPD) electricity tariff-setting methodology.

On June 6, the SCA upheld an appeal by the National Energy Regulator of South Africa (Nersa) against an earlier North Gauteng High Court judgment, which had found Nersa’s approval of Eskom’s RCA application for 2013/14 to be unlawful.

Nersa allowed Eskom, which applied under the RCA, to recoup lost revenue of R22.8-billion for the financial year, a partial clawback of R11.2-billion, which translated into a tariff hike of 9.4% in 2016.

The regulator has, however, refrained from considering further RCA applications until legal certainty had been established.

The matter was brought before the courts by a number of manufacturing businesses in the Nelson Mandela Metropolitan area. However, the Constitutional Court dismissed the application to appeal the SCA judgment on the basis that the application “bears no prospects of success”.

State-owned power utility Eskom said the Constitutional Court decision cleared the “path for Nersa to process Eskom’s RCA submissions for the 2014/15, 2015/16 and 2016/17 financial years”.

It was not immediately clear what the implications of the decision would be on Eskom’s 2018/19 tariff application, which was currently being reworked to comply with a recent Nersa decision not to condone Eskom’s request to deviate from the MYPD methodology, as well as the minimum information requirements for a tariff application. The utility had been given 30 calendar days from July 27 to comply.

In an earlier application, Eskom requested a 19.9% hike from April 1, 2018, having been granted a 2.2% increase from April 1, 2017, largely as a consequence of the fact that no further RCA applications had been processed amid the legal uncertainty.