By Karabo Marifi
The Gauteng High Court has delivered a significant victory for millions of South African electricity consumers, ruling in favour of the civil rights organisation AfriForum in a critical case against the National Energy Regulator of South Africa (NERSA). The court’s decision, handed down on 19 August 2024, blocked NERSA’s appeal to implement municipal electricity tariff hikes deemed “unlawful and invalid.”
This ruling follows a June 2024 judgment that declared NERSA’s decision to approve tariff increases for municipalities without the necessary cost-of-supply (CoS) studies as a violation of the Electricity Regulation Act of 2006. CoS studies are essential as they ensure municipalities charge consumers fairly, reflecting the true cost of providing and maintaining electricity services.
Despite the High Court’s earlier ruling, NERSA allowed 178 licensed electricity distributors to implement tariff increases on 1 July 2024, even though only 66 had completed the mandatory CoS studies. This left at least 112 municipalities charging millions of consumers unlawful rates for over a month. The court’s latest decision means these municipalities must revert to the electricity rates approved for the 2023/2024 financial year until compliant CoS studies are submitted.
AfriForum’s Manager of Local Government Affairs, Morné Mostert, expressed concern over the impact of this judgment on municipal budgets but stressed that it was necessary to protect consumers who have been overcharged due to administrative lapses. AfriForum plans to send an urgent letter to NERSA, demanding a clear plan to refund consumers for the overcharged amounts and requesting a list of municipalities that have not yet complied with the CoS study requirements.
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