Municipalities Face Deadline as Nersa Cracks Down on Electricity Price Hikes for 2025

South African residents could be spared further electricity price hikes in 2025—if their municipalities fail to meet a strict deadline set by the National Energy Regulator of South Africa (Nersa).

In a recent notice, Nersa warned all municipal electricity providers that they must submit cost-of-supply studies along with their 2025/26 tariff applications by 30 April 2025. If they don’t, their requests for electricity price adjustments will be rejected.

“All tariff applications are required to be supported by a cost of supply study,” said Nersa. “This will facilitate processing and approval in time for the 1 July 2025 implementation date.”

Failure to comply is not just a procedural issue—it’s a breach of the Electricity Regulation Act (ERA) and the conditions of their municipal power supply licenses. According to Section 15 of the ERA, charging unapproved tariffs is illegal.

Why This Matters

Many municipalities have historically increased electricity tariffs without conducting detailed studies to determine the actual cost of delivering electricity to homes and businesses. In fact, Nersa skipped enforcing the cost-of-supply requirement in 2024, sparking legal action.

Civil rights group AfriForum launched an urgent legal bid in June 2024 to block municipalities from increasing prices without valid cost studies. Though the High Court initially ruled in their favor in 2022, Nersa went ahead with approvals for 178 municipalities, leading to more court action.

That legal battle continues—if AfriForum wins its appeal, municipalities may be forced to refund customers for 2024’s increases, triggering a potential administrative nightmare.

Who’s Compliant So Far?

As of now, only a few municipalities have complied with Nersa’s directive, including:

• City of Mbombela

• Dr Pixley ka Isaka Seme

• Matjhabeng

• Msukaligwa

• Overstrand

• Saldanha Bay

• Senqu

• Umsobomvu

• Witzenberg

The Legal and Financial Stakes

AfriForum’s local government affairs manager, Morné Mostert, insists that the law is clear: “Without this document, we can’t determine what the tariff of a municipality should be.”

Mostert argues that municipalities have overcharged consumers and profited without following due process. “Municipalities have gotten away with not supplying any details… They’ve made enormous profits selling electricity without doing the work required to justify those costs.”

What Happens Next

If more municipalities fail to submit cost-of-supply studies by the deadline, they won’t be able to raise tariffs on 1 July 2025. This could bring temporary relief for consumers already burdened by high electricity costs.

However, if Nersa enforces the rule unevenly—as it did in 2024—it may face renewed legal challenges and public criticism.

For now, all eyes are on 30 April 2025. Whether municipalities comply—or once again sidestep the rules—will determine if South Africans see another round of electricity price increases.

{Source: My Broad Band}

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