The National Energy Regulator of South Africa (NERSA) must give an undertaking in the interest of electricity consumers that it will comply with the recent court order on municipal electricity tariff increases until its appeal against the order is concluded, Afriforum said last week.
This follows a high court order that municipalities that did not submit cost studies are not allowed to implement tariff increases. Madibeng Municipality was not listed in the court order as one of the municipalities that submitted cost studies. The municipality disagreed with this last week, saying its 2020 cost study was still valid, and that NERSA approved Madibeng’s tariff increases on the day the court order was issued.
AfriForum achieved a huge victory in court on 28 June after ruling in its favour in the unlawful approval of electricity tariff increases for the 2024/2025 financial year.
“Following the court order on 28 June, NERSA has submitted an application for leave to appeal against this order, which means that since Monday (1 July) municipalities have been charging the new electricity tariff increases on their residents’ power consumption. The court declared NERSA’s decision to consider applications for electricity tariff increases without the required cost studies to be unlawful and invalid. NERSA was told by the court not to consider any applications for electricity tariff increases, provided the relevant licensed electricity distributors submitted a cost study. However, the regulator went ahead and approved 178 municipalities’ applications, even though not all of these municipalities submitted the required cost studies,” said Morné Mostert of AfriForum.
However, on the same day as the high court’s order, NERSA announced that it had met this deadline and that all 178 licensed electricity distributors’ tariff increase applications had already been considered and approved.
Mostert said if NERSA continues to allow municipalities without cost studies to charge the new higher electricity rates, the civil rights organisation will bring an application in the High Court in Pretoria to compel NERSA to comply with the original court order pending the outcome of its appeal application. NERSA had until Friday (5 July) to respond to AfriForum’s request.
“This court case was conducted in the interest of consumers to promote fairness and transparency in the approval of municipal electricity tariffs. It is therefore in the interest of electricity consumers that the court order, which was heard on an urgent basis, remains in force until NERSA’s appeal proceedings have been concluded. “NERSA is causing an administrative nightmare rather than fulfilling its legal obligations and protecting consumers. This will place a great burden on legitimate power distributors such as municipalities to compensate consumers for the higher electricity tariffs they’ve been charging if NERSA’s appeal application fails,” Mostert said.