Nersa: Unlawful 2025/26 Electricity Tariffs Conceded in Court

• Nersa conceded in the Pretoria High Court that its 2025/26 municipal electricity tariff approvals were unlawful.
• The case impacts electricity users in Johannesburg, Ekurhuleni, Nelson Mandela Bay, Emfuleni, and Madibeng.
• The exact amount and payment date for household refunds are currently unconfirmed.
• Judge RG Tolmay has requested proposals from lawyers and suggested an independent expert to calculate overcharges.
• The dispute highlights the challenges in securing refunds for electricity overcharges, with Ekurhuleni claiming it cannot afford them.

The National Energy Regulator of South Africa (Nersa) has officially conceded in the Pretoria High Court that its approvals for municipal electricity tariffs for the 2025/26 financial year were unlawful.

The National Energy Regulator of South Africa (Nersa) has officially conceded in the Pretoria High Court that its approvals for municipal electricity tariffs for the 2025/26 financial year were unlawful. This significant admission, reported on November 11, stems from a legal challenge initiated by large electricity consumers, including Mpact, who identified critical errors in the municipal calculations that Nersa had endorsed without proper verification. The core of the Nersa unlawful electricity tariffs court case centers on these unchecked municipal submissions, which led to inflated charges for consumers.

This concession by Nersa impacts electricity users across five specific municipalities: Johannesburg, Ekurhuleni, Nelson Mandela Bay, Emfuleni, and Madibeng. While the regulator has acknowledged the illegality of its 2025/26 tariff approvals, the practical implications for households and businesses in these areas, particularly regarding the quantum and distribution of any potential Johannesburg electricity refund, Ekurhuleni electricity refund, or Nelson Mandela Bay electricity refund, remain uncertain. There is currently no confirmed amount or timeline for any refunds.

Despite Nersa's concession, the question of who precisely stands to benefit from any corrective action is still a point of contention in the ongoing legal proceedings. The applicant, Mpact, initially proposed that any adjustments or refunds should be limited to the litigants who brought the challenge. Conversely, Nersa has argued that the corrections should extend to all electricity users within the affected municipalities, ensuring a broader impact for those subjected to the South Africa electricity overcharges.

Adding to the complexity, the municipality of Ekurhuleni has stated that it lacks the financial capacity to issue refunds, highlighting a potential hurdle in the implementation of any court-ordered relief. Judge RG Tolmay, presiding over the case, has requested that legal representatives submit proposals to determine the most equitable and feasible mechanism for addressing the unlawful tariffs. She also raised the possibility of appointing an independent expert to meticulously calculate the extent of the overcharges, emphasizing that the situation "cannot go on indefinitely." The hearing was still in progress when the initial reports were published, indicating that a final resolution on the refund process is yet to be reached.

The current Nersa unlawful electricity tariffs court case is not an isolated incident in South Africa's energy landscape. Businesses in Pietermaritzburg, for instance, are already familiar with the difficulties of converting a court victory into tangible financial relief on electricity accounts. Melanie Veness, CEO of the Pietermaritzburg and Midlands Chamber of Business, recently discussed a separate dispute concerning Msunduzi's 2024/25 tariffs. Her organization has been actively assisting its members in securing account credits following a prior court order, noting that excessive charges, coupled with deteriorating infrastructure, impose significant burdens on businesses.

Similarly, residents of Nelson Mandela Bay have navigated a distinct electricity refund process. A Gqeberha High Court order mandated the metro to reverse a flat-rate pricing change introduced in July 2026 and reimburse residents who had paid additional amounts. However, this process was met with reports of inconsistent refunds and varying prices at different electricity outlets. The municipality attributed delays to diverse payment platforms and assured that its systems would automatically identify eligible customers. It is crucial to note that these separate cases, while illustrating the challenges of electricity overcharges and refunds, do not directly establish eligibility for households in the five-municipality case currently before the Pretoria High Court.

This ongoing legal battle underscores the critical importance of regulatory oversight in municipal tariff approvals and the potential for challenging such decisions when errors or unlawful practices are identified. The Nersa 2025/26 tariff approvals concession sets a precedent, acknowledging the regulator's responsibility to scrutinize municipal calculations more rigorously. For lawyers advising clients in Johannesburg, Ekurhuleni, Nelson Mandela Bay, Emfuleni, and Madibeng, monitoring the Pretoria High Court's final decision on the refund mechanism is paramount.

The complexities surrounding the quantum and distribution of refunds, coupled with municipalities' potential financial constraints, highlight the intricate nature of enforcing court-ordered relief. This case serves as a significant example of how regulatory approvals of municipal tariffs can be challenged and the subsequent difficulties in ensuring that affected consumers receive appropriate compensation for South Africa electricity overcharges.

Lawyers should advise clients in affected municipalities (Johannesburg, Ekurhuleni, Nelson Mandela Bay, Emfuleni, Madibeng) to monitor the Pretoria High Court's final decision on the mechanism for electricity tariff refunds, as the quantum and distribution remain contested despite Nersa's concession of unlawful approvals. This case highlights the potential for challenging regulatory approvals of municipal tariffs and the complexities of enforcing court-ordered refunds.

Source: Original reporting via Moneyweb and Scrolla.Africa