Court Ruling Upholds 2024/25 Electricity Price Hikes for Over 100 South African Municipalities

Over 100 municipalities in South Africa will continue to enforce the 2024/25 electricity price hikes approved by the National Energy Regulator of South Africa (Nersa). This follows the Gauteng High Court’s dismissal of AfriForum’s application to reverse the increases.

Court Battles Over Tariff Hikes

The price hikes, which took effect on 1 July 2024, were implemented by 178 licensed electricity distributors. However, only 66 of these distributors conducted the required cost-of-supply studies, a cornerstone of Nersa’s tariff application process.

AfriForum initially won a court ruling mandating that non-compliant municipalities revert to 2023/24 pricing within 60 days unless they submitted the necessary studies. Nersa appealed this ruling, eventually taking the case to the Supreme Court of Appeal (SCA), where it remains pending.

In the interim, AfriForum sought a High Court order to enforce the earlier judgment, but this application was dismissed on 5 December 2024.

Nersa Welcomes the Ruling

Nersa expressed relief at the court’s decision, stating:

“The June 2024 decisions of the Energy Regulator to approve municipal tariffs for the 2024/25 financial year remain valid.”

Had the court sided with AfriForum, municipalities would have faced financial strain, as 2024/25 tariffs would have been invalidated.

Impact on Municipalities and Consumers

For consumers, this ruling means continued payment of the increased tariffs, despite questions about their validity. AfriForum has pledged to fight for reimbursements if the SCA ultimately rules in its favor.

If Nersa loses the SCA appeal, municipalities could face significant financial fallout, potentially affecting service delivery and budget allocations.

What’s Next?

As the Supreme Court of Appeal deliberates, the 2024/25 price hikes remain in effect. Municipalities are under pressure to submit the required cost-of-supply studies to avoid further legal challenges and financial uncertainty.

AfriForum’s continued legal fight highlights growing dissatisfaction with electricity pricing in South Africa, where consumers already grapple with affordability and inconsistent service delivery.

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