- The High Court declared NERSA’s 2025/26 municipal tariff approval process unconstitutional due to flawed public participation.
- Judge Labuschagne condemned the regulator’s refusal to publish cost of supply studies and failure to follow PAJA regulations.
- A rule nisi was issued to enforce strict timelines and transparency, while keeping the current tariff approvals in force.
The High Court in Pretoria has delivered a damning judgment against the National Energy Regulator of South Africa (NERSA), declaring its 2025/26 municipal electricity tariff approval process invalid for breaching constitutional and statutory obligations.
Judge J Labuschagne, presiding over the urgent application brought by AfriForum NPC, found that NERSA’s implementation of its public participation process was so procedurally flawed that it failed to meet the basic requirements of administrative justice.
AfriForum argued that NERSA’s notice-and-comment procedure under Section 4 of the Promotion of Administrative Justice Act (PAJA) was implemented in a way that excluded the public, undermined transparency, and violated the rights of municipalities and residents alike. The court agreed, pointing to NERSA’s refusal to publish cost of supply studies, its failure to issue notices in newspapers and multiple languages, and its chronic delays in responding to municipal applications.
In a particularly stark example, the court noted that Mogale City’s tariff application was published on 19 June and approved the very next day, leaving no room for public comment. “There was no public participation as none was possible,” Judge Labuschagne wrote.
He described NERSA’s conduct as “beyond concerning,” especially its unilateral decision to treat cost of supply studies as confidential. “The cost of supply study is a public document intended for public and official scrutiny,” he said. “It is a public watchdog that has, due to this private policy, kept the public in the dark about matters that directly concern the public.”
Approvals remain, but the court demands reform
Despite declaring the process invalid under Section 172(1)(a) of the Constitution, the court declined to set aside the tariff approvals already granted. Instead, it issued a rule nisi returnable on 18 November 2025, compelling NERSA to comply with strict procedural obligations going forward.
These include publishing bulk tariffs by 31 January, requiring municipalities to submit applications by 30 March, and ensuring that all applications are published with cost of supply studies, or a clear statement if such studies are absent. Final decisions must be communicated by 5 May, and NERSA may not deviate from these timelines without good cause and prior notice.
The court also placed a duty on municipalities to ensure that the public is informed of the participation process chosen by NERSA. This aligns with Section 152 of the Constitution, which mandates inclusive and transparent local governance.
Judge Labuschagne emphasised that electricity tariffs are a cornerstone of municipal revenue and must be finalised in time to allow municipalities to adopt lawful budgets by 1 July each year. “The consistent lateness of NERSA’s responses has adversely affected the public’s right to participate in the finalisation of budgets and municipal electricity tariffs,” he said.
NERSA defended its conduct by blaming municipalities for late submissions and claiming that it had substantially complied with its obligations. It also argued that the matter was not urgent and that judicial intervention would constitute overreach. The court rejected these arguments, stating that NERSA had adopted a policy of non-compliance with PAJA regulations and failed to seek lawful deviation through the courts.
“Where a lawful deviation can be motivated as permissible policy, an application to the court to sanction such conduct is a minimum legality requirement for a regulator enforcing licence conditions on licensees. It is not a law unto itself,” the judge concluded.
The ruling has immediate implications for all 192 municipalities affected by the 2025/26 tariff cycle and sets a precedent for how public entities must engage the public in future regulatory processes. The matter returns to court on 18 November, when NERSA and the municipalities will have to show cause why the court’s interim directives should not be made final.
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