Tribunal finds that it has jurisdiction in case involving alleged excessive pricing of electricity
The Competition Tribunal has ruled that it does have jurisdiction to hear and decide a case in which a large producer of wire and steel products accuses a local municipality of charging it excessive prices for electricity.
Cape Gate (Pty) Ltd (“Cape Gate”) self-referred a complaint to the Tribunal against the Emfuleni Local Municipality, accusing the municipality of contravening the Competition Act by charging it excessive prices for electricity since 2017. Cape Gate self-referred the complaint to the Tribunal after the Competition Commission decided to non-refer the matter.
Arguments on jurisdiction
Before the merits of the main application could be heard, the municipality raised a technical legal point on jurisdiction. It argued that the Tribunal does not have jurisdiction to hear Cape Gate’s complaint because the Electricity Regulation Act (“ERA”) gives power to the sector regulator, the National Energy Regulator of South Africa (“NERSA”), to investigate complaints regarding discrimination of tariffs or failure by a licensee to abide by its license conditions. In brief, the municipality argued that Cape Gate’s excessive pricing complaint falls within NERSA’s investigatory powers – and that Cape Gate should have exhausted “internal remedies” or procedures set out in the ERA before approaching the competition authorities.
Cape Gate, in turn, argued that NERSA does not have the power to adjudicate over alleged conduct relating to excessive pricing, as such powers lie exclusively with the competition authorities in terms of the Competition Act. It emphasised the distinction between price discrimination and excessive pricing and argued that even in the event that NERSA has jurisdiction over alleged excessive pricing, then such jurisdiction is shared concurrently between the competition authorities and NERSA.
Tribunal order and reasons
In dismissing the municipality’s technical legal point on jurisdiction, the Tribunal concludes: “…it is beyond doubt that the Tribunal has jurisdiction with regard to this complaint of excessive pricing” The assertion that Cape Gate was required to pursue an “internal remedy” through a complaint to NERSA is without foundation”.
In summary the Tribunal notes, among others, that: “…we do not have to determine whether the ERA gives NERSA the power to deal with complaints of excessive (as opposed to discriminatory) pricing, since if NERSA does have that power, there is concurrent jurisdiction…” Citing case law, the Tribunal notes that where there is concurrent jurisdiction, the Tribunal will have authority, unless there is an express provision ousting the Tribunal’s jurisdiction.
Although conceding that the Competition Act creates a system of concurrent jurisdiction, the municipality contended that there is no concurrency with regard to the present matter, on the basis that concurrency only commenced in 2021 on conclusion of a Memorandum of Agreement (MOA) between the Commission and NERSA. The Tribunal finds that this is incorrect. Concurrency arises from the Act, not from the conclusion of the MOA. Furthermore, the MOA itself states that it is not intended to be a legally enforceable document and merely seeks to describe the nature and co-operative intentions of the parties thereto and to suggest guidelines for co-operation, with the result that nothing shall diminish the full autonomy of either party or constrain either party from discharging its statutory functions.
The Tribunal’s full reasons for its decision can be accessed here: https://test.comptrib.gendel.com/case-detail/20317
Issued by:
Gillian de Gouveia, Communications Officer
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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