NERSA’s appeal bid regarding municipal power tariff hikes fails
19 August 2024
A huge victory in the interest of millions of municipal electricity consumers was achieved in the Gauteng High Court today, says the civil rights organisation AfriForum. The National Energy Regulator of South Africa’s (NERSA) plans to push through unlawful and invalid municipal tariff hikes were prevented this morning when their application for leave to appeal was dismissed.
This follows after the High Court ruled in AfriForum’s favour in June this year and confirmed that NERSA’s decision to consider municipalities’ applications for tariff hikes without the required cost-of-supply studies is unlawful and invalid.
According to Morné Mostert, AfriForum’s Manager of Local Government Affairs, the submission of cost-of-supply studies is a required component of municipalities’ applications for tariff hikes as prescribed by the Electricity Regulation Act 4 of 2006. Cost-of-supply studies are critical because they provide a clear outline of what municipalities should charge for electricity to deliver the service and maintain networks properly.
However, municipal power tariff increases were implemented nationwide at 178 licensed electricity distributors on 1 July this year, despite only 66 distributors having conducted cost-of-supply studies. At least 112 municipalities have therefore been charging unlawful rates to millions of consumers for more than a month.