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Nersa ruling on power prices to possibly affect some municipalities

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The financial viability of some municipalities could be severely affected following a court ruling preventing some local authorities from increasing their electricity tariff from Monday.

This comes after civil rights group AfriForum’s success in its urgent court application against the National Energy Regulator of South Africa (Nersa).

Afriforum challenged Nersa for considering electricity tariff increases without the required cost studies.

The High Court in Pretoria ruled that the regulator may only consider applications for electricity tariff increases from municipalities unless the required cost studies are submitted.

The court has ordered municipalities whose cost studies are outstanding to continue charging tariffs based on existing rates.

Nersa has already indicated that it met the deadline to approve 178 licenced municipalities to increase their tariffs next week.

The ruling is a setback to many struggling municipalities that have already concluded their budgets based on the expected tariff increase.

Source: SABC News

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