Mogale City’s increased electricity tariffs due back in the court
ZELDA VENTER
THE legal battle over the implementation of a new electricity tariff structure in the Mogale City Local Municipality in the West Rand is not over, with AfriForum, which filed an application for leave to appeal the Gauteng High Court, Pretoria’s ruling in which it approved the new structure.
The court dismissed the civil rights organisation’s application to have the implementation of Inclining Block Tariffs (IBTs) and subsequent tariff increases declared illegal and invalid.
AfriForum argues that the case was not properly considered, and the principle of non-joinder of interested parties was incorrectly applied in the case.
This is after the municipality’s legal team argued that the case could not proceed because the National Energy Regulator of South Africa (Nersa) was not added as a party.
“The court erred in accepting the municipality’s defence of non-joinder on the grounds that Nersa might have an interest in the matter. This, despite the fact that the Regulator in no way indicated that it had a direct or substantial interest in the matter,” Deidré Steffens, advisor for local government affairs at AfriForum said.
She added that to test whether a party should be added to a case, it must be determined whether a court order would adversely affect a party’s interests.
AfriForum argues in its application for leave to appeal that the court concluded, without specific findings or legal basis, that Nersa's interests would indeed be prejudiced or adversely affected by a court order.
The Mogale City Municipality previously applied a fixed tariff structure, but last year decided to implement IBTs and announced a 12.7% increase without informing residents of the new tariff structure or giving them the opportunity to challenge the decision.
This resulted in some tariffs increasing by more than 30% at certain usage levels.
“Nersa’s primary mandate is to promote a robust and sustainable electricity sector that benefits all South Africans. AfriForum is therefore of the opinion that Nersa would not be prejudiced or adversely affected if the court were to find that the municipality’s misrepresentation of the new tariff structure and the subsequent implementation of a further increase were unlawful,” Steffens said.
The court delivered a judgment at the end of January on the matter concerning the increase in electricity tariffs for the 2024-2025 financial year, as implemented by Mogale City Local Municipality.
AfriForum contended that the increases were excessive, did not align with Nersa’s determined tariffs, lacked proper public consultation, and fell short of transparency from the municipality.
In responding to the court ruling, the municipality said it aligns with its position, which maintains that the increase in tariffs followed the approval of the Cost of Supply report by Nersa.
It said following this, Council approval was sought for the proposed tariffs, as endorsed by the energy regulator.
“Despite disputes from resident associations, opposition political parties, businesses, and residents, it is important to note that the tariffs are designed to be cost-reflective and promote efficient energy usage. High usage is charged at higher rates, while low usage is charged at lower rates, encouraging responsible energy consumption,” the municipality said.
It added that the electricity tariffs are structured to protect low-income households by using IBT. These tariffs increase with higher electricity usage, assuming that poor households use less electricity.
IBT is also designed to encourage prepaid electricity use, as no fixed service charges are applied to prepaid users, reducing costs related to debt collection and meter reading, the municipality explained.
zelda.venter@inl.co.za
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