Rising vigilance

26th August 2016 By: Terence Creamer - Creamer Media Editor

Rising vigilance

In all spheres of South African public life, the level of civil society engagement and vigilance is rising. Increasingly, too, citizens are not merely tackling issues at the level of principle, but are also taking into account the minutiae of procedural fairness, executive responsibility and programme rationality and efficiency.

In the infrastructure space, this approach arguably first played itself out in the way the campaign against e-tolls in Gauteng evolved. The then Opposition to Urban Tolling Alliance – now broadened to be known as the Organisation Undoing Tax Abuse (Outa) – did not simply stop at tapping pent-up anger and emotion. It delved into the intricate details of road construction, project finance and fiscal efficiency.

Likewise, the Treasure the Karoo Action Group against hydraulic fracturing has mounted a sophisticated crusade, which is ensuring that government adopts a far more scientific stance on fracking before awarding licences. Here, too, the issues of transparency and procedural fairness have been hallmarks.

It appears that similar models are now being adopted in the area of nuclear energy, where various civil society formations are poised to act, with Earthlife Africa Johannesburg and the Southern African Faith Communities’ Environment Institute having already taken legal action against what they allege to be a lack of transparency and fair process surrounding government’s intention to procure new nuclear capacity.

Without question, much of the current attention is focused on the energy milieu, epitomised recently by the extremely adverse reaction to revelations that Eskom was seeking to put a halt to further procurement of electricity from independent power producers.

However, the level of vigilance arguably reached a new level recently with the court case brought against the National Energy Regulator of South Africa (Nersa) and Eskom with regard to the recent tariff adjustment approved following the utility’s regulatory clearing account (RCA) application for revenue and cost variances for the 2013/14 financial year – the first year of the third multiyear price determination (MYPD3) control period.

Nersa made the determination to allow for a 9.4% tariff increase from April 1 following public hearings on the matter in six of the country’s nine provinces between January 18 and February 5.

However, five industrial companies and the Nelson Mandela Bay Business Chamber have successfully contested the regulator’s determination, with Judge Cynthia Pretorius setting aside the decision and remitting it to Nersa.

The judge found Eskom and Nersa’s lack of adherence – both in terms of not securing quarterly reports for the 2013/14 financial year and with regard to prescribed application timeframes – to the MYPD methodology, as well as the failure to communicate the deviation to stakeholders to be “irrational, unfair and unlawful”.

She also found that Nersa did not discharge its statutory and regulatory mandate when it failed to properly address Eskom’s inefficiencies during the period and by allowing a pass-through adjustment relating to an agreement with Aggreko International Projects.

It is far too early to tell for sure whether the ruling will have any impact on actual electricity tariffs, particularly given that the judge indicated that she would not substitute the decision. What it definitely does show is that civil society is finding not only its protest voice, but also its legal muscle.