Energy regulator Nersa has admitted in the High Court in Pretoria that electricity tariffs it approved for five municipalities were unlawful, Moneyweb reported.
The tariffs applied in the Johannesburg, Ekurhuleni and Nelson Mandela Bay metros in the previous financial year. They also applied in the Emfuleni and Madibeng local municipalities.
According to Moneyweb, the figures behind the tariff applications were full of errors. Nersa approved them without checking the numbers.
Large electricity users pointed out the errors in court papers. The regulator then conceded that its approvals were “indefensible”, Moneyweb reported.
The court heard on 9 November that businesses in Nelson Mandela Bay paid 76% more for electricity in 2025/26 than it cost the metro to supply it.
Judge RG Tolmay is hearing the latest applications. She said she wants an order that gives real relief and stops power users from having to return to court.
“The lawyers make money and the taxpayers pay for it. Every few weeks there is another court application. The legal position is clear, but how does that help anyone?” Tolmay asked in court, according to Moneyweb.
“This cannot go on indefinitely,” she said.
The judge raised the idea of appointing an independent expert to work out how much customers were overcharged. Affected customers could then be credited without delay.
She also raised the option of stricter court supervision to make sure the final order is carried out.
The court is weighing a remedy that would compensate those who overpaid. It also wants to prevent a “flood” of new applications over similar errors in other Nersa tariff decisions.
Ekurhuleni has strongly opposed the applications against its tariffs. The metro argued that it cannot afford to refund customers.
Packaging company Mpact is one of the parties challenging its 2025/26 tariffs. It proposed that any adjustments be limited to the parties before the court.
Nersa argued that this would be unfair to other consumers. It said any adjustments should apply to all electricity users in the municipalities concerned.
The regulator also asked the court to let it phase in tariff corrections over future years. It said this would help prevent sudden price shocks.
Advocate Michael Chaskelson represents several of the applicants. He said provision should be made for interest if crediting his clients takes time.
Attorney MC Botha of Pieterse Sellner Erasmus TRM Tax Attorneys acts for four applicants. They are the Casting, Forging and Machining Cluster of South Africa, Autocast SA, Mpact and Coega Steels.
Botha indicated that he is preparing similar applications to challenge the current year’s Nersa tariffs in several municipalities.
The court heard that several such cases have come before the courts over the past 10 years. Madibeng last had a lawful tariff around 2013.
Moneyweb reported that Nersa and the municipalities failed to comply with court orders in those cases. Customers who won were left without the relief they had sought.
About a year ago, Judge Anthony Millar ruled in the same court that the 2024/25 tariffs in four municipalities were unlawful. These were Johannesburg, Ekurhuleni, Madibeng and Msunduzi in Pietermaritzburg.
In January, Millar sent the matter back to Nersa to set the tariffs again. Nersa missed the 30 June deadline and had still not finished the work by November.
Under that order, the previous year’s tariffs or the equivalent Eskom tariff would apply if Nersa missed the deadline.
Melanie Veness, chief executive of the Pietermaritzburg and Midlands Chamber of Business, said Msunduzi must grant credits of about R200 million. The credits are owed to nearly 700 businesses that were chamber members when the case began.
Tolmay instructed the legal teams to consider possible solutions and submit proposals to the court.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.