The City of Cape Town and Johannesburg metros, as well as the Mogale City local municipality will on Tuesday join the National Energy Regulator of South Africa (Nersa) in facing AfriForum in the North Gauteng Pretoria High Court, over Nersa’s regulation of municipal electricity tariffs.

AfriForum argues that Nersa has been approving municipal electricity tariffs without the use of proper cost of supply studies and public participation processes.

The City of Cape Town and Johannesburg metros, as well as the Mogale City local municipality, recently filed their opposing papers.

Last week, AfriForum secured a court order halting Eskom's proposed tariff increase agreement with Nersa, aimed at raising electricity prices significantly over three years.

The Gauteng High Court's ruling allows AfriForum to intervene in Eskom's review application against Nersa's recent 12.7% tariff hike approval.

AfriForum approached the court in August to have the public participation process followed for the introduction of the current financial year’s new municipal electricity tariffs declared invalid but not reviewed.

The civil rights organisation is also requesting the court issue an interdict to ensure specific timelines for future public participation processes.

AfriForum’s adviser for local government affairs Deidré Steffens explained that the Johannesburg Metro and the Mogale City municipality opposed AfriForum’s application in full, while the City of Cape Town only opposed the organisation’s application relating to the adjusted timelines.

“This Western Cape metro agrees with AfriForum that Nersa’s current processes pose serious problems for the metro’s budget process but in turn proposes an alternative adjusted timeline. The City of Cape Town requests that Nersa communicate its final decision regarding Eskom’s tariffs by January each year, that municipalities’ applications must be submitted by the end of March and that Nersa must announce the decision by 5 May,” she said.

Steffens stated that legislation clearly stated that municipalities’ applications for increases for electricity tariffs must be accompanied by a complete cost-of-supply (COS) study.

“However, in practice things look entirely different. Year after year, Nersa continues to approve municipalities’ applications for electricity tariff increases with or without COS studies, even though two High Court rulings ruled that applications for increases without the necessary studies may not be considered,” she explained.

Steffens highlighted that if AfriForum’s application was successful, the energy regulator would have to issue invitations to municipalities next month to submit their applications by January 10, 2026, two months earlier than was currently the case.

AfriForum also requests that the final decision regarding tariff applications be completed by March 10, 2026.

Steffens explained that currently, Nersa only finalised applications each year by the end of June and said the current timelines for submission, consideration and approval of municipal electricity tariff increases were “inefficient and put pressure on municipalities’ budget processes and therefore budgets”.

She noted the Municipal Finance Management Act states that municipalities must have their draft budgets approved by the municipal council in March, and to ensure a transparent draft budget, a municipality must submit approved electricity tariffs and not just estimates.

“…however, this cannot be done at this stage, as Nersa is still busy with the application process at that time. This means that a municipality must submit a draft budget without knowing the extent of its largest source of income – namely, electricity sales. A more streamlined process will therefore benefit both municipalities and residents,” she emphasised.

AfriForum’s application calls for the introduction of new proposed timelines to help ensure a “transparent and fair” application process but does not ask for the reviewing of the 2025/26 financial year tariffs, she pointed out.