National Energy Regulator of South Africa v Borbet SA (Pty) Ltd and Others; Eskom Holdings SOC Limited v Borbet SA (Pty) Ltd and Others

NERSA approved an additional 1.4% electricity tariff increase for Eskom for the 2013/2014 tariff year, over and above an already approved 8% increase under the Multi-Year Price Determination Methodology (MYPDM3). The increase followed Eskom’s application under the Regulatory Clearing Account (RCA) mechanism, citing revenue under-recovery and higher primary energy costs. The increase was implemented and passed on to municipalities and end-consumers. Several large industrial electricity consumers and a business chamber challenged NERSA’s decision in the High Court, which reviewed and set aside the approval on the basis that NERSA failed to follow its own methodology. NERSA and Eskom appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order setting aside NERSA’s decision was replaced with an order dismissing the review application with costs, including the costs of two counsel.

The case is significant for affirming that tariff determinations by NERSA are administrative action subject to judicial review, while simultaneously underscoring the principle of judicial deference to specialised regulators. It clarifies the interpretation and application of the MYPDM and RCA mechanisms and reinforces the balance between regulatory oversight, Eskom’s financial sustainability, and consumer protection in South African energy regulation.