The City of Cape Town has scored a major legal win in its ongoing dispute with the National Energy Regulator of South Africa (Nersa); a move expected to bring greater transparency and predictability to how electricity tariffs are set across the country.
In a ruling that aligns with constitutional requirements, the court declared Nersa’s public participation process for 2025/26 municipal tariff applications invalid under section 172(1)(a) of the Constitution.
This decision effectively mandates Nersa to meet strict annual timelines when determining municipal electricity tariffs.
The court order sets out three key deadlines that Nersa must now adhere to each year, as per NovaNews:
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By 31 January: Notify municipalities of approved Eskom and generator increases.
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Before public participation: Consider and publish each municipality’s cost-of-supply study and tariff proposal.
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By 5 May: Finalise all tariff decisions and release reasons for each ruling.
This timeline aims to eliminate the delays that have long caused frustration among municipalities, who often receive crucial tariff decisions after their financial years have already begun.
Cape Town Mayor Geordin Hill-Lewis hailed the decision as a significant advancement for all municipal residents across the country, ensuring they profit from increased openness in the decisions surrounding electricity pricing.
The mayor did not hold back in his criticism of Nersa’s previous handling of the process, saying the order ‘halts Nersa’s chaotic and delinquent handling of municipal tariff applications.’
‘We are appreciative that the court accepted our arguments, imposing a timetable on Nersa that brings to an end the regulator’s common practice of late decisions, without reasons, after the municipal financial year has already begun, and after all budget calculations and public participation is long done,’ he added.
The City joined the case initiated by lobby group AfriForum, recommending revised timeframes for Nersa’s decision-making process. The court and applicants both accepted these recommendations, which now form the foundation of the final order.
Hill-Lewis noted that Cape Town has consistently worked towards fairness in tariff regulation, explaining that it is one of a handful of municipalities that actually submits detailed cost-of-supply studies to the regulator each year in our efforts to run a sustainable, reliable, and dynamic electricity service for Capetonians.
Meanwhile, the High Court issued a rule nisi, giving Nersa and other respondents until 18 November to show cause why the order should not be made final.
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