NERSA approaches Supreme Court of Appeal to overturn ruling on power tariff hikes, AfriForum ready to fight to the end
19 September 2024
AfriForum received official notification yesterday of the National Energy Regulator of South Africa’s (NERSA) decision to turn to the Supreme Court of Appeal in the case regarding the regulator’s implementation of unlawful and invalid tariff hikes for at least 100 municipalities. However, the civil rights organisation is ready to oppose this application in the interests of millions of power consumers in municipalities across the country.
According to the documents delivered to AfriForum, NERSA wants to appeal against the judgment delivered on 28 June this year in the Gauteng High Court, for which an application for leave to appeal was rejected on 19 August. In this court case brought by AfriForum against the energy regulator, the court ruled in AfriForum’s favour and found that NERSA’s failure to consider tariff hikes without the required cost-of-supply studies is unlawful and invalid. The court also determined that the 2023/2024 power tariffs of all municipalities that did not submit the necessary cost-of-supply studies must be reinstated.
According to Morné Mostert, AfriForum’s Manager of Local Government Affairs, NERSA’s latest move is extremely disappointing. “The regulator had more than a year and a half to implement the methodology regarding cost-of-supply studies. They failed to implement it successfully, and now they are not only failing consumers but also failing to live up to their mission statement. Although their mission is to regulate the ‘energy industry in accordance with government laws and policies’, it is clear that legislation and court decisions do not carry much weight in their books,” explains Mostert.
The submission of cost-of-supply studies is a required component of municipalities’ applications for tariff increases prescribed by the Electricity Regulation Act 4 of 2006, emphasises Mostert. He says that these studies are of critical importance in the determination of power tariffs because they give a clear outline of what municipalities’ tariffs must be to be able to deliver the service properly and maintain networks.
“These directives are precisely there to ensure the sustainability of power supply in municipalities and to prevent unfair increases at the expense of consumers. NERSA’s frantic efforts to implement these unlawful and invalid tariff hikes show that the regulator considers itself above the law. It has already been proven in our court case that the courts agree with us – there is no other way – NERSA must simply obey the law and court rulings and scrap the latest increases that have been unlawfully implemented,” concludes Mostert.
Meanwhile, AfriForum will consult with its legal team to investigate all possible remedies that can be implemented in the interim.
NERSA’s application for leave to appeal to the Supreme Court of Appeal attached.
Issued by Morné Mostert, Manager: Local Government Affairs, AfriForum, 19 September 2024
