For businesses in Pietermaritzburg, the fight over inflated electricity bills has moved from the courtroom to the ledger. The Pietermaritzburg and Midlands Chamber of Business is now processing credits owed to its members after a High Court order set aside Nersa’s approval of Msunduzi Municipality’s 2024/25 electricity tariffs. The chamber’s CEO, Melanie Veness, says members have been told plainly what comes next: the chamber has informed the municipality that it holds a court order requiring the accounts of its members to be credited.
“We’ve declared disputes on every single one of the accounts that we’ve submitted a credit claim for,” Veness says. “We’re now actually deducting it from our monthly bills, and we’ve told the council that if they try to disconnect, that will be unlawful.”
That determination reflects years of frustration. Veness says the chamber has taken the court action it has over the years because there was no accountability in the system. “You pay the excessive charges and the municipalities don’t spend the money on electricity function, so you’ve got failing infrastructure and the costs associated with that. And there are no resources allocated, so that is what we took the action in conjunction with the Nelson Mandela Bay Business Chamber to get municipalities to submit cost of supply studies that detail the costs in relation to the electricity business.”
The stakes, she argues, reach well beyond any single business account. It is unfair to the people who have overpaid tariffs, she says, and they need to be compensated. The effect on South Africa’s economy of excessive tariffs and poor services, she points out, is enormous.
What has changed is that the regulator itself has now conceded the point. In the Pretoria High Court, South Africa’s National Energy Regulator (Nersa) has admitted that its electricity tariff approvals for five municipalities were unlawful because of significant calculation errors. The admissions cover tariffs approved for the previous financial year for three metropolitan municipalities, Johannesburg, Ekurhuleni and Nelson Mandela Bay, and two local municipalities, Emfuleni in Gauteng and Madibeng in North West.
One reason for the miscalculations is that the numbers underpinning the tariff applications by these councils were riddled with errors, and Nersa approved them without checking the figures, as reported by Moneyweb. After large electricity users highlighted the errors in court papers, the regulator had little choice but to concede that its approvals were “indefensible”.
The question now before the court is how to provide practical relief to customers who were incorrectly charged and paid too much. Referring to an influx of such cases, Judge RG Tolmay is quoted as raising the possibility of appointing an independent expert to determine the extent of the overcharging, so that affected customers could be credited without delay.
For the chamber and its members, that delay is precisely what they have been trying to avoid. The Msunduzi case shows what happens when a court order is secured but the money does not simply follow: the chamber has had to declare disputes on every account for which it submitted a credit claim, deduct the amounts from its monthly bills, and warn the council that any attempt to disconnect supply would be unlawful.
Meanwhile, the pattern Veness describes is a familiar one for businesses that have lived through it. Excessive charges are paid, the money is not spent on the electricity function, infrastructure fails, and the costs of that failure land back on the same customers. Her organisation’s response, pursued alongside the Nelson Mandela Bay Business Chamber, has been to push municipalities to submit cost of supply studies that detail the costs in relation to the electricity business.
Whether the regulator’s court admissions translate into faster relief for the five municipalities’ customers remains to be seen. For now, the businesses owed credits in Msunduzi are not waiting; they are deducting what they are owed and daring the council to test them in court.