Another mistake with electricity tariffs
Resellers weigh legal costs against the prospect of effective relief.
The Electricity Resellers Association of South Africa (Erasa) is facing a dilemma over electricity tariffs, with the choice of appealing a High Court decision or accepting tariffs that will result in significant financial losses for its members in Ekurhuleni. This situation stems from a case before the High Court in Pretoria, where Judge RG Tolmay has requested legal teams to develop a solution to stop a "flood of court applications" regarding unlawful tariffs set by the National Energy Regulator of South Africa (Nersa).
Nersa has acknowledged that the tariffs set for several municipalities, including Ekurhuleni and the City of Johannesburg, for the 2025/26 financial year were unlawful. The court has remitted these tariff determinations back to Nersa, but the regulator has yet to make a new determination. This pattern of Nersa's errors has been identified by Tolmay, who hopes to resolve the issue decisively.
Erasa's current challenge is that Nersa repeated the same mistakes in setting reseller tariffs for 2026/27, which has been a recurring issue addressed by the courts. Despite winning their cases, the applicants are left without effective remedies due to repeated court applications. The local electricity resellers buy electricity in bulk and supply it to individual units, mainly in sectional title complexes.
The local distributor, usually a municipality, delivers electricity to the complex's entrance, and internal distribution is handled by the developer, who appoints a reseller to manage the electricity meters. Consumers can only be charged a tariff equivalent to what they would have paid if they bought electricity directly from the licensed distributor.
In Ekurhuleni last year, a complete mismatch existed between the tariffs set by municipalities and Nersa, making the reseller business model unworkable. Johan Hopley, chair of Erasa, stated that when Nersa reduced the retail tariff for Ekurhuleni's current year, it left the resellers with no margin, turning a 15% margin into a 17% loss over the course of a year.
The financial burden of Erasa's previous litigation against Ekurhuleni's reseller tariff for 2025/26 amounted to R1.5 million, a significant amount for an industry body. The question now arises whether Erasa should spend more money to return to court for a potentially effective remedy or face the possibility of annual court applications. The situation with Nersa's tariff decisions is not improving; rather, it is getting worse.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
