If you paid for electricity in Johannesburg, Ekurhuleni, Nelson Mandela Bay, Emfuleni or Madibeng last financial year, the regulator now admits your tariff should never have been approved.
The National Energy Regulator of South Africa told the Pretoria High Court that its 2025/26 tariff approvals for those five municipalities were unlawful, Moneyweb reports. The numbers in the municipalities’ applications were riddled with errors. Nersa approved them without checking.
That is the regulator’s whole job.
What the court heard
Large electricity users spotted the errors and challenged the tariffs. Faced with their papers, Nersa conceded its approvals were “indefensible”, according to Moneyweb. EWN put it bluntly as another Nersa blunder.
The court heard on 9 November that businesses in Nelson Mandela Bay paid 76% more for electricity in 2025/26 than it cost the metro to supply it. As The Detail notes, a lawful tariff can include distribution costs and a reasonable return, so that gap is not the same as a refund amount. But it shows how far off the approved numbers were.
Judge RG Tolmay, who is hearing the matter, made her frustration clear. “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 raised the idea of appointing an independent expert to work out how much customers were overcharged, and of closer court supervision to make sure any order is actually carried out. She told the legal teams to come back with proposals.
The fight over refunds
Here is where the admission stops feeling like good news.
Ekurhuleni told the court it cannot afford to refund customers. Packaging group Mpact, one of the challengers, proposed limiting adjustments to the parties in court. Nersa argued that would be unfair and that corrections should apply to all users in the affected municipalities, but phased in over future years to avoid price shocks, Moneyweb reports.
Read that last part again. The regulator that approved the wrong tariffs wants to fix them slowly, through future adjustments. Households who overpaid in 2025/26 could wait years to see any of it, if they see it at all. As of the latest reports, no refund amount, list of qualifying customers or payment date has been set.
There is also history. Moneyweb notes that Nersa and municipalities have ignored previous court orders in similar cases. Judge Tolmay’s talk of supervision is a direct response to that.
The bigger problem
This is not only a Nersa story. It is a municipal finance story.
On Wednesday, Treasury director-general Duncan Pieterse said reforms to electricity distribution are well behind schedule, Business Day reports. He said municipalities distribute more than half of South Africa’s electricity but are trapped in financial instability, ageing infrastructure and governance failures, and that electricity revenue meant for maintenance has in many cases been diverted elsewhere.
Put the two together. Councils overcharge on electricity, the regulator waves it through, the money does not go back into the network, and when a court finally says stop, a metro says it cannot afford to pay back what it took.
The accountability ask
Three of the affected municipalities, Johannesburg, Ekurhuleni and Nelson Mandela Bay, are hung councils whose new governments are being negotiated right now. Whoever takes over inherits this liability.
Every party at those tables should be asked three things. Will you honour whatever credits the court orders, for all customers and not just big litigants? Will you publish how electricity revenue is spent? And will you stop sending Nersa tariff applications nobody has checked?
Nersa should answer a simpler question. If it does not check the numbers, what exactly is it approving?
Qwezzy