NATIONAL NEWS - The Gauteng High Court in Pretoria has declared the National Energy Regulator of South Africa’s (Nersa) approval process for municipal electricity tariff hikes unconstitutional.
The Witness reports that the move could bring greater transparency and potential relief to household budgets already stretched by rising living costs.
Judge Etienne Labuschagne ruled that Nersa’s practice of approving tariff increases without proper cost studies or meaningful public participation violated both constitutional and statutory obligations.
The judgment, delivered on Friday, followed an urgent application by civil rights organisation AfriForum, which challenged Nersa’s approval of municipal electricity tariffs for the current financial year.
Labuschagne criticised Nersa’s argument that electricity customers have no right to know what it costs municipalities to supply power, saying it was ‘beyond concerning’ that the regulator could declare cost-of-supply studies confidential.
“The history of local government has demonstrated public anger and protest, sometimes violent, regarding poor service delivery,” the judge said.
When a municipality applies to Nersa for tariff approval, the cost-of-supply study is a public document intended for public and official scrutiny.
Impact on electricity costs
Electricity tariffs approved by Nersa determine how much municipalities can charge residents for power.
Increases in these tariffs often ripple through to households and small businesses, adding to inflationary pressure.
While the court did not overturn the current 2025/26 tariff approvals, which saw a 12.7% Eskom increase passed down to municipalities, it ordered Nersa to reform its future processes to ensure full public participation.
According to the order, Nersa must:
- Announce Eskom’s latest tariffs by 31 January each year
- Require municipalities to submit tariff applications and cost-of-supply studies by 30 March
- Conduct public consultations and finalise decisions by 5 May, publishing reasons for each approval.
These changes mean communities will now have an opportunity to comment on proposed electricity price increases before they are implemented.
A win for transparency and accountability
AfriForum, which brought the case, hailed the ruling as a victory for every South African who pays for electricity.
“This judgment ensures that consumers will have a proper and fair say in how municipal tariffs are determined,” said AfriForum. “It prevents Nersa and municipalities from making decisions behind closed doors that directly affect household budgets.”
The court also issued a provisional order giving all 158 municipalities until November 18 to provide reasons why the new timelines should not be implemented.
Municipalities under pressure
Labuschagne noted that Nersa often blamed municipalities for late submissions, forcing the regulator to bypass public participation. He said this excuse could no longer justify cutting corners, as electricity tariffs form an ‘essential component’ of municipal budgets and must be handled transparently and timeously.
The City of Cape Town welcomed the judgment, saying it will benefit residents nationwide.
“This is a positive step for residents across South Africa, who will gain from more transparent electricity tariff decisions,” said Mayor Geordin Hill-Lewis.
“The order halts Nersa’s chaotic and delinquent handling of municipal tariff applications.”
Background
Municipal electricity tariffs are approved annually by Nersa and are tied to Eskom’s bulk supply increases. Earlier this year, Eskom’s approved 12.7% hike, though lower than its requested 36%, added significant strain to household budgets and business operating costs.
Economists say that ensuring transparency and accountability in the tariff-setting process could help stabilise prices and improve public trust in energy regulation — both crucial as South Africans continue to face high electricity costs and erratic power supply.
‘We bring you the latest Garden Route, Hessequa, Karoo news’
