A Landmark Judgment for Transparency in South Africa’s Electricity Tariff Setting
A recent high court ruling has the potential to reshape how municipal electricity tariffs are set in South Africa. In late October 2025, the court determined that the process used by the National Energy Regulator of South Africa (Nersa) to decide annual electricity price hikes was unconstitutional. The judgment highlighted that Nersa’s approach stifled public participation and violated the right to fair administrative action.
This decision marks a significant shift in the way municipalities determine annual electricity price increases. From now on, all electricity users will have access to information that justifies these price hikes. Municipalities will be required to publish key financial documents that support their proposed tariff changes.
The judgment also mandates that municipalities plan far ahead by adhering to strict new deadlines for tariff applications. This is a crucial step toward ensuring transparency and accountability in the electricity pricing process.
Understanding Nersa and Its Role
Nersa is the regulatory authority responsible for overseeing South Africa’s electricity, gas, and fuel industries. It must approve all bulk electricity tariffs proposed by Eskom, the state-owned energy provider. However, this approval must be done transparently, allowing for public input.
The court found that Nersa had failed in its duty to ensure transparency. Its processes were consistently delayed and secretive, leaving the public with little opportunity to provide feedback on proposals to increase electricity prices.
An advocacy group called Afriforum, representing South Africa’s Afrikaner population, took Nersa to court due to years of recommending high price hikes without proper justification. The court’s ruling means that Nersa can no longer ignore rules requiring public consultation. It will also need to adhere to a strict, court-ordered timetable moving forward.
The Impact of Secrecy on Public Participation
Every year, South Africans face rising electricity prices. For instance, in April 2025, Eskom announced a 12.74% price increase. These steep annual increases place a significant financial burden on many households and businesses.
The process for determining these increases begins when Eskom proposes its bulk electricity tariffs to Nersa. Nersa approves these bulk prices, and then municipalities set their own prices based on Nersa guidelines. By law, Nersa reviews municipal tariffs using a study that outlines the cost of generating and supplying electricity. It then publishes the new prices for public comment before approving them. Municipalities cannot charge unapproved rates.
However, the court found that this system was broken in practice. One major issue was the consistent delay in Nersa informing municipalities about the new Eskom bulk prices, which led to municipalities missing submission deadlines. This squeezed the time available for public comment, sometimes to the point where there was no participation at all.
Regulations under the Promotion of Administrative Justice Act require a minimum of 30 days for public comment from the date a notice is published. For example, in Mogale City, proposed electricity price hikes were published on 19 June 2025, and Nersa approved them the very next day, making public comment impossible.
Withholding Critical Information from the Public
The court also found that Nersa withheld the cost-of-supply studies from the public, citing confidentiality. This denied the public access to the most important document needed to make meaningful comments. The court ruled that these studies, submitted by municipalities to Nersa, should be public documents open to scrutiny.
Additionally, Nersa had ignored the law by publishing proposed tariff increases only on its website and social media. The law clearly states that notices must be published in the Government Gazette and South Africa’s newspapers in at least two official languages.
What the Court Ordered Nersa to Do
The court issued binding directions that create a strict, non-negotiable timetable for all future tariff approvals:
- By 31 January every year, Nersa must inform municipalities of the new Eskom bulk tariff for the following year.
- Municipalities must submit their full tariff applications, including their cost-of-supply studies, to Nersa by 30 March of every year.
- Nersa must publish every single municipal application for an electricity tariff increase along with its cost-of-supply studies.
- Finally, Nersa must finalize its decisions and communicate them by 5 May every year.
This new timeline aims to end the chaos caused by consistent delays and ensure that Nersa’s decisions are made in time for municipalities to finalize their budgets, which must be tabled 90 days before their 1 July financial year starts.
Why This Matters for Ordinary South Africans
This judgment empowers ordinary citizens by compelling the publication of cost-of-supply studies. This gives the public the tools to hold their local municipalities accountable. While public participation in other municipal processes, such as Integrated Development Plans, is already provided for by law, it is often ineffective in practice.
The electricity ruling is significant because it allows communities and experts to scrutinize the data and ask whether the tariff hike is paying for efficient services or for issues like bloated salary bills, electricity theft, and general mismanagement.
As active watchdogs, people will be able to ensure that electricity price hikes are transparent, timely, and open to public scrutiny. This shift transforms the public from passive bill-payers to informed participants in the decision-making process.
Felix Dube, Lecturer in the Department of Law, University of Venda.
