Court imposes strict timelines for Nersa municipal electricity tariff applications

THE National Energy Regulator of South Africa (Nersa) has been given until May 5 to finalise all municipal tariff applications as part of new court-imposed annual timelines. 

The order granted last week follows a Gauteng High Court, Pretoria a judgment in October that Nersa’s approval of the implementation of municipal electricity tariffs without the use of proper cost-of-supply (COS) studies and public participation processes was unconstitutional.

Judge Etienne Labuschagne at the time issued a rule nisi, calling on the respondents, including all 158 municipalities, to show cause, if any, why the order regarding the proposed timelines should not be made.

The court has now imposed annual timelines on Nersa, Eskom, and all municipalities, which include that Eskom must submit its Retail Tariffs Structural Adjustments Application (ERTSA) annually by August 31.

Nersa must notify municipalities in writing by January 31 of the wholesale tariffs at which electricity will be supplied for the following financial year. 

Municipal electricity tariff applications must be submitted to Nersa by March 20, and it must make its final decision on each municipality’s tariffs by May 5 and communicate the reasons for the decision immediately.

In addition to setting this timeline, the court also ruled that all tariff applications and COS studies must be made public for public comment. Nersa must explicitly indicate instances where a COS study is absent from the application.

Judge Labuschagne ruled that no deviation from the court order is permitted without the court’s approval. 

Reacting to the judgment, Mayor Geordin-Hill Lewis said the court outcome brings to an end Nersa’s delinquent handling of municipal tariff applications and the common practice of late decisions, without reasons, after the municipal financial year has already begun. 

“This has made a mockery of complex budget calculations and public participation, which are all complete by the time Nersa decisions have arrived in the past. Now Nersa will have to inform municipalities of decisions timeously, and publish the reasons immediately. This is a positive step for residents in all municipalities across South Africa, who will benefit from more transparency in electricity tariff-setting decisions,” he said.  

AfriForum said the new regulatory regime brings a permanent end to those malpractices and creates, for the first time, a system where consumers can truly and timely participate in decision-making on electricity tariffs.

Cape Times