South Africa’s electricity tariff machinery is failing at the point of delivery, and the regulator responsible for checking the numbers has conceded as much in the High Court in Pretoria. Nersa has admitted that the tariffs it approved for the previous financial year in the Johannesburg, Ekurhuleni and Nelson Mandela Bay metros, along with the Emfuleni and Madibeng municipalities, were unlawful. The reason: the figures underpinning those applications were riddled with errors that the regulator approved without verifying.
The concession came only after large electricity users exposed the errors in court papers, leaving Nersa with little option but to describe its own approvals as “indefensible”. The court is now weighing a remedy that would compensate customers who overpaid while avoiding a flood of similar applications from electricity users seeking to have comparable tariff decisions set aside.
The operational record behind these approvals is poor. 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 deliver the service. Judge RG Tolmay, hearing the latest applications this week, has signalled that she wants an order producing real relief for customers rather than another round of litigation. “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?” she asked. “This cannot go on indefinitely.”
To break the cycle, Tolmay raised the possibility of appointing an independent expert to determine the extent of the overcharging, so that affected customers can be credited without delay. She also floated stricter court supervision to ensure the eventual order is actually implemented, and instructed the legal teams to consider possible solutions and submit proposals. The emphasis on supervision reflects a track record of non-delivery: Nersa and the municipalities have previously failed to comply with several court orders in similar cases, leaving applicants without the relief they had won.
That track record is well documented. Moneyweb previously reported that Judge Anthony Millar ruled in the same court about a year ago that the tariffs Nersa approved for 2024/25 in Johannesburg, Ekurhuleni, Madibeng and Msunduzi in Pietermaritzburg were unlawful. In January he referred the matter back to the regulator to correct its mistakes by redetermining the tariffs. Nersa missed the 30 June deadline and, by November, had still not finalised the redetermination. Under the court order, either the previous year’s tariffs or the equivalent Eskom tariff would apply in the event of a missed deadline, both of which would offer relief to businesses whose tariffs, according to the applicants, had been unlawfully set too high.
Meanwhile, even where the law is settled, implementation has stalled. According to Melanie Veness, CEO of the Pietermaritzburg and Midlands Chamber of Business, the Msunduzi Municipality must grant credits totalling about R200 million to nearly 700 businesses that were chamber members when the case was instituted. That has yet to happen. The court has now heard that several such cases have been brought over the past 10 years, and that Madibeng last implemented a lawful tariff around 2013. In all of them, Nersa and the municipalities concerned failed to comply with court orders, leaving prejudiced customers without meaningful relief despite winning their cases.
More challenges are already in the pipeline. MC Botha, an attorney at Pieterse Sellner Erasmus TRM Tax Attorneys, represents the Casting, Forging and Machining Cluster of South Africa (CFMC), Autocast SA, Mpact and Coega Steels in the latest applications, and indicated he is preparing similar applications on behalf of some clients to challenge this year’s Nersa tariffs in several municipalities.
The remedy itself is contested. Ekurhuleni, which has strongly opposed the applications challenging its tariffs, argued that it cannot afford to refund customers. In response, Mpact, one of the parties challenging the metro’s tariffs for 2025/26, proposed limiting any adjustments to the parties before the court. Nersa countered that this would be unfair to other consumers and said any adjustments should apply to all electricity users in the municipalities concerned. The regulator also asked the court to allow it to phase in tariff corrections over future years, using adjustments similar to those applied to Eskom, to prevent sudden price shocks. Advocate Matthew Chaskelson, who represents several of the applicants, said that if crediting his clients takes time, provision should also be made for interest.
The pattern now before Tolmay is one of approvals issued without verification, deadlines missed, orders ignored and credits never paid. The hearing continues, and the court’s attempt to craft a remedy that actually reaches customers will test whether oversight on paper can be turned into delivery on the ground. The case and its history are examined in reporting at https://www.moneyweb.co.za/news/south-africa/electricity-tariffs-in-three-metros-unlawful-nersa-admits/.