Coal transporters ask court not to sign deals with independent power producers

The Coal Transporters Forum has asked the high court in Pretoria to set aside the power purchase agreements Eskom signed with independent power producers last year.
The Coal Transporters Forum has asked the high court in Pretoria to set aside the power purchase agreements Eskom signed with independent power producers last year.
Image: 123RF/Artur Nyk

Eskom's deals with independent power producers came under scrutiny on Monday when the Coal Transporters Forum asked the high court in Pretoria to prevent the parastatal from signing any agreements with the producers.

The forum has asked the court to stop Eskom from signing power purchase agreements with a number of independent power producers (IPPs) pending the National Energy Regulator of SA's (Nersa) decision on granting generation licences to the IPPs.

The IPPs themselves, Eskom, the energy minister and Nersa have all opposed the application, and on Monday called for it to be dismissed with costs.

The matter was set down to be heard over two days, but it was finalised in less than two hours on Monday. Judgment has been reserved.

While the forum wanted to interdict Eskom from signing the power purchase agreements, it did not ask the court to review the decision by Nersa in granting generation licences to the IPPs.

The forum also did not challenge the determinations issued by the minister of energy in 2011 and 2012, which outlined South Africa's new generation capacity procurement for the immediate future. This meant that the forum could not make arguments on whether IPPs should be part of the country's energy mix at all.

In its affidavit filed last year, the forum said the agreements between Eskom and the IPPs came at a time when electricity consumption was showing a decline of 1% for 2016/2017, and when Eskom had announced a surplus of 5,600MW‚ including an operating reserve of 2,000MW.

Alwyn Rossouw SC, for the forum, on Monday insisted that there was no decision taken by Nersa granting  generating licences to the IPPs on the court record.

Rossouw said these licences could only be issued by Nersa.

However, Wim Trengove SC, for the IPPs, said the forum sought to interdict the conclusion of the purchase power agreements.

Trengove denied that no agreements had been signed.

"The evidence … is that all these agreements, but for three, have been concluded," Trengove said.

He that said as an alternative relief, the forum had sought an order declaring that the agreements were invalid.

"These administrative decisions may only be set aside on review. At no time did the [forum] contend these agreements are unlawful," Trengove said.

Trengove said the forum still contended that Nersa should be the one to issue the generation licences to the IPPs.

"The licences, on evidence before the court, have been issued."

Trengove said Nersa issued the IPP's generation licences and it did so after following a public participation process for each project, including public hearings and by issuing a written decision.

William Mokhari SC, for the energy minister, said a number of concessions had been made by the forum, which should have been made a long time ago. He said the only issue that remained was that the forum should pay its legal costs.

The court reserved judgment.


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