Bad news for electricity price hikes at over 100 municipalities in South Africa

Over 100 municipalities in South Africa will have to keep paying the latest 2024/25 electricity price hikes approved by energy regulator Nersa earlier this year, as the bid to have these changes reversed has been dismissed.

The Gauteng High Court has dismissed AfriForum’s application to force the implementation of an earlier court order that would have reversed the tariff hike.

Earlier this year, AfriForum took the 2024/25 Nersa-approved price hikes to court, seeking to have them halted because the municipalities failed to base their tariff applications on cost-of-supply studies required by Nersa.

On 1 July this year, 178 licensed electricity distributors nationwide implemented the 2024/25 municipal power tariff increases, despite only 66 distributors conducting cost-of-supply studies.

AfriForum won the initial case in court, with the impacted municipalities given 60 days to submit the necessary studies or be forced to revert to 2023/24 pricing.

Nersa first appealed the matter at the High Court—which it lost—ultimately going to the Supreme Court of Appeal (SCA), where it was given access and the case still stands.

In the interim, however, AfriForum sought a court order forcing the reversal of the price hikes until the case was concluded.

According to Nersa, this application by AfriForum has now been dismissed, meaning the 2024/25 price hikes remain in effect and valid until the appeal is processed by the SCA.

“Nersa welcomes the ruling by the High Court of South Africa delivered on 5 December 2024, which dismissed AfriForum’s application to execute the court order of 8 July 2024.

“The 8 July 2024 judgement required municipalities that failed to base their tariff applications on the cost of supply studies to implement the Nersa-approved tariffs for the 2023/24 financial year.

“AfriForum was seeking to have the High Court judgement of 8 July 2024 implemented whilst the appeal process that was granted to Nersa by the Supreme Court of Appeal is underway.

“Had the court granted AfriForum’s order, certain decisions of the Energy Regulator on municipal tariff applications made in June 2024 would have been invalid.

“With the application having been dismissed, the June 2024 decisions of the Energy Regulator to approve municipal tariffs for the 2024/25 financial year remain valid,” the regulator said.

AfriForum previously stated that it would fight to have municipal customers reimbursed for the invalid prices charged. If Nersa ultimately loses the SCA legal battle, the impact on municipal finances could be significant.

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