Good news, South Africa! If your electricity bill has been looking a little too “charged” lately, there might be some cash headed your way. AfriForum, the civil rights group, has just scored a major win in the Gauteng High Court, forcing the National Energy Regulator of South Africa (Nersa) to take action over dodgy electricity tariff hikes by 112 municipalities.
In short, municipalities across the country increased electricity rates starting July 1, 2024, but without doing their homework — specifically, they failed to submit required “cost-of-supply” (COS) studies. According to the Electricity Regulation Act of 2006, these studies are essential to justify any tariff hikes. Long story short, these hikes were deemed unlawful.
The result? Municipalities will now have to reverse the extra charges and revert to the rates approved for the 2023/2024 financial year, unless they can submit the missing studies within 60 days. AfriForum is already demanding a refund plan, and Nersa, although not thrilled about the ruling, is still mulling over its next steps.
But, hold your applause — while this ruling is a win for consumers, the reality is that these municipalities are already in financial hot water, with many struggling with debt and poor financial management. In fact, municipal debt to Eskom is skyrocketing, with some municipalities defaulting on over half of their electricity payments. So, refunds could leave these municipalities even more strapped for cash, potentially leading to cutbacks in basic services or further borrowing.
In any case, it’s a small win for consumers who have been on the receiving end of unjust hikes. Now, all eyes are on Nersa and the municipalities to see how they will clean up this mess and whether refunds will be in our future — or will the lights go out on this victory? Stay tuned!