The City of Cape Town has notched a significant legal victory against the National Energy Regulator of South Africa (Nersa), in a judgment expected to transform how electricity tariffs are set for municipalities across the country.
In a landmark ruling, the High Court declared Nersa’s public participation process for the 2025/26 municipal electricity tariff applications invalid, finding it inconsistent with the Constitution under section 172(1)(a).
Strict new timelines
The decision enforces strict new timelines for the regulator’s annual tariff determinations – a move hailed by Cape Town officials as a long-overdue step toward greater transparency and predictability in the energy sector.
According to the order, Nersa must now adhere to three key deadlines every year:
- By 31 January: Notify municipalities of approved Eskom and other generator price increases
- Before public participation: Consider and publish each municipality’s cost-of-supply study and tariff proposal
- By 5 May: Finalise all municipal tariff decisions and release written reasons for each ruling
These timelines aim to prevent the chronic delays that have left municipalities – including Cape Town – scrambling to finalise budgets without knowing the regulator’s approved tariff rates.
‘Major victory’
Mayor Geordin Hill-Lewis welcomed the ruling, calling it “a major victory for municipalities and residents nationwide.”
He said the order “halts Nersa’s chaotic and delinquent handling of municipal tariff applications,” and would ensure that decisions are made “on time and with proper reasons.”
“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,” Hill-Lewis said.
AfriForum
The case originated from an application brought by civil society group AfriForum, with the City of Cape Town joining as a co-applicant. Both parties proposed the revised timelines that the court ultimately endorsed.
Hill-Lewis noted that Cape Town remains one of the few municipalities submitting comprehensive cost-of-supply studies to Nersa annually, saying the city strives to provide “a sustainable, reliable, and dynamic electricity service for Capetonians.”
The court also issued a rule nisi, granting Nersa and other respondents until 18 November to show cause why the order should not be made final.
If upheld, the ruling will establish binding procedural standards for all municipalities – potentially reshaping the national electricity tariff-setting process and strengthening accountability within South Africa’s energy regulation framework.
