Ekurhuleni electricity tariff application inflated by billions

The City of Ekurhuleni Metropolitan Municipality, whose electricity tariffs for 2024/25 were declared unlawful by the Gauteng High Court in Pretoria, submitted a new application that contained a massive error of more than R7 billion after it completely miscalculated and overestimated the amount it would pay Eskom for bulk purchases. This would have driven electricity tariffs up sharply. In addition, it wants to unlawfully load electricity tariffs by at least another R1 billion in costs for debt as well as penalties and interest, according to one stakeholder at a recent public hearing held by energy regulator Nersa.

Ekurhuleni is one of four municipalities whose electricity tariffs for 2024/25 were declared unlawful and set aside by the court. The others are Madibeng, based in Brits in North West Province; Msunduzi, based in Pietermaritzburg in KwaZulu-Natal; and Johannesburg. The court remitted the matter to Nersa so that the tariffs could be redetermined.

This must be done before 30 June and could lead to adjustments on all consumers’ bills in those municipalities. If this is not finalised by that date, the parties that brought the court applications will, for that period, only be liable for payments based on Eskom’s Megaflex tariff, which is significantly lower than the tariffs that were set aside by the court. Stakeholders who participated in the public hearing on the new applications by Ekurhuleni, Madibeng and Msunduzi agreed that the applications were so incomplete and riddled with errors that Nersa would not be able to lawfully determine a tariff.

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“If Nersa nevertheless proceeds, we will have to weigh up our options, which may include going back to court,” says Melanie Veness, CEO of the Pietermaritzburg & Midlands Chamber of Business. The public hearing on Johannesburg’s reapplication is scheduled for later this month. The issue arises against the backdrop of several court cases that resulted in the way Nersa has for years determined municipal electricity tariffs being declared unlawful.

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