South Africa's energy regulator has admitted in the High Court in Pretoria that electricity tariffs it approved for three metropolitan municipalities and two local municipalities were unlawful, raising the prospect of credits for households and businesses that overpaid.

The admission, reported by Moneyweb on 11 November 2026, concerns tariffs for the previous financial year in the Johannesburg, Ekurhuleni and Nelson Mandela Bay metros, as well as the Emfuleni and Madibeng local municipalities.

Errors in the figures

According to the report, the numbers underpinning the tariff applications submitted by the five municipalities were riddled with errors, yet the National Energy Regulator of South Africa (Nersa) approved them without checking the figures. After large electricity users highlighted the errors in court papers, the regulator had little choice but to concede that its approvals were, in its own description, indefensible.

The court is now considering what remedy should follow. It must find a way to compensate people who overpaid, while preventing a flood of fresh applications seeking to have other Nersa tariff decisions set aside on similar grounds.

The scale of the overcharging was illustrated in evidence heard on 9 November. The court was told that businesses in Nelson Mandela Bay had to pay 76 per cent more for electricity in 2025/26 than it cost the metro to provide the service.

Judge seeks a lasting solution

Judge RG Tolmay, who is hearing the latest applications this week, has made clear that she wants an order that delivers actual relief, rather than another ruling that is never put into effect. She raised the possibility of appointing an independent expert to determine the extent of the overcharging, so that affected customers could be credited without delay, and of stricter court supervision to ensure that the eventual order is implemented.

“The lawyers make money and the taxpayers pay for it. Every few weeks there is another court application. The legal position is clear, but how does that help anyone?” she asked, according to Moneyweb. “This cannot go on indefinitely.”

She instructed the legal teams to consider possible solutions and submit proposals.

A pattern of ignored orders

The latest admission follows a history of similar cases in which Nersa and the municipalities concerned failed to comply with court orders, leaving applicants without the relief they had sought even after winning in court.

About a year ago, Judge Anthony Millar ruled in the same court that the electricity tariffs Nersa had approved for 2024/25 in Johannesburg, Ekurhuleni, Madibeng and Msunduzi in Pietermaritzburg were unlawful. In January, he referred the matter back to Nersa to correct its mistakes by redetermining the tariffs by 30 June. Nersa missed that deadline and, by November, had still not finalised the redetermination.

Under the court order, either the previous year's tariffs or the equivalent Eskom tariff would apply if Nersa failed to meet the deadline. In both cases, that would provide relief to businesses whose tariffs, according to the applicants, had been unlawfully set too high.

Nersa's own published decision on City Power's redetermination, in a reasons document, records that the High Court set aside the 2024/25 tariff approval on 14 January 2026 and directed a redetermination by 30 June 2026. The regulator's executive committee considered City Power's application on 7 September 2026 and approved redetermination tariffs based on a cost-of-supply study, with effect from 1 July 2024.

Dispute over refunds

How any relief should be paid remains contested. According to Melanie Veness, chief executive of the Pietermaritzburg and Midlands Chamber of Business, Msunduzi Municipality must grant credits totalling about R200 million to nearly 700 businesses that were chamber members when the case was instituted. However, this has yet to happen.

Ekurhuleni, which has strongly opposed the applications challenging its tariffs, argued that it cannot afford to refund customers. Mpact, one of the parties challenging its electricity tariffs for 2025/26, proposed limiting any adjustments to the parties before the court. Nersa argued, however, that this would be unfair to other consumers, and that any adjustments should apply to all electricity users in the municipalities concerned.

The regulator also argued that the court should allow it to phase in tariff corrections over future years, using adjustments similar to those applied to Eskom, to help prevent sudden price shocks. Advocate Michael Chaskelson, who represents several of the applicants, said that if crediting his clients takes time, provision should also be made for interest.

MC Botha, an attorney at Pieterse Sellner Erasmus TRM Tax Attorneys, represents the Casting, Forging and Machining Cluster of South Africa, Autocast SA, Mpact and Coega Steels in the latest applications, and is preparing similar challenges to this year's tariffs in several municipalities.