AfriForum successfully interdicts municipal electricity tariff hikes

Civil rights organisation AfriForum has claimed victory as some municipalities will not implement the annual electricity tariff hikes from Monday, 1 July.

This comes as the Gauteng High Court in Pretoria found that the National Energy Regulator of South Africa’s (Nersa) decision to consider municipalities’ applications for electricity tariff increases without the required cost studies is unlawful and invalid.

SOME MUNICIPALITIES WILL NOT IMPLEMENT ELECTRICITY TARIFF INCREASE 

Earlier this month, AfriForum launched an urgent court bid to prevent the tariff increases.

Manager of Local Government Affairs at AfriForum, Morné Mostert, said using a cost study for tariff increases is critical because it clearly outlines municipalities’ tariffs to deliver the service properly and maintain networks.

“Under a Supreme Court order of October 2022, a cost study is required as part of municipalities’ applications for rate increases. This is also prescribed by the Electricity Regulation Act 4 of 2006,” she said.

Mostert also said municipalities without cost studies base their applications on an estimate of the service’s cost. However, applications for tariff increases must be based on accurately calculated figures to ensure that fair increases are passed on to consumers.

On Friday, the Gauteng High Court in Pretoria ruled that Nersa may only consider applications for electricity tariff increases from municipalities if the required cost studies are also submitted.

As such, the court ordered municipalities whose cost studies are absent will have to continue charging electricity tariffs based on the existing rates approved for the 2023/2024 fiscal year. Nersa can reconsider municipalities’ applications for electricity tariff increases for the 2024/2025 fiscal year, provided the necessary cost studies are submitted within 60 days from Friday, 28 June.

These municipalities will implement the annual electricity tariff hikes on Monday, 1 July. Source: X/Kallie Kriel

AFRIFORUM WELCOMES COURT RULING 

According to the civil rights organisation 178 licensed electricity distributors’ tariff increase applications have already been considered and approved. However, only 66 of these municipalities submitted cost studies.

Following the ruling, Mostert said the fight against unreasonable electricity tariff increases does not end with this court order. She said it is now the responsibility of communities, businesses, and civil institutions to consider the content of their municipalities’ cost studies to ensure that municipalities do not deceive or mislead consumers.

“The court case was done in the interest of consumers and to promote fairness and transparency in the approval of municipal electricity tariffs,” Mostert said.