OVAC holds Overstrand Municipality to account over electricity tariff increases

The Overstrand Accountability Collective (OVAC) is a local organisation in the Overstrand region of the Western Cape, aimed at holding decision-makers in the region to account. This is a necessary task because South Africa has very little real accountability.

As part of this effort OVAC published an article in the Village News and released a letter (below) to the Mayor, Councillors, and Municipal Manager, exposing uncomfortable truths that both the public and the municipality need to be aware of.

Dear Speaker, Mayor, Councillors, and Municipal Manager

On 27 March 2026, the Overstrand Accountability Collective (OVAC) released a press statement titled “Electricity increases in the Overstrand under the Spotlight.”

Both the Municipal Manager and District Councillor Annelie Rabie responded on social media, suggesting that the author of the statement (Anton Kruger) should study the municipality’s Cost of Supply (COS) study.

In response, we searched the municipal website for the referenced COS study. No results were returned. In fact, a general search of the internet also yielded no results.

If the COS study is not available in the public domain, this raises concerns about whether the document was subjected to meaningful public participation and comment, as required by law. As Council is aware, the fixed electricity charges introduced over the past two years, as well as the increases planned for the next two years, are based on approval of this study by the National Energy Regulator of South Africa (NERSA).

If the underlying study was not made publicly available or subjected to proper public scrutiny, the lawfulness of the process followed — and consequently the charges levied — may be open to challenge.

In addition, we are in possession of an audio recording of the council meeting held on 27 February 2026, during which the proposed 2026 electricity tariff increases were discussed.

However, the official public comment period for these tariff increases only closes on 26 March 2026.

Approving tariff increases prior to the conclusion of the public participation process would be inconsistent with the requirements of the Municipal Finance Management Act, which requires that tariff proposals be subjected to proper public consultation before final adoption as part of the municipal budget process.

Should tariffs have been approved before the close of the comment period, the decision may therefore be procedurally defective.

Furthermore, decisions taken without proper consultation may also be subject to review under the Promotion of Administrative Justice Act, which requires administrative actions by public bodies to be lawful, reasonable, and procedurally fair.

If it is ultimately established that the tariff structure — including the fixed electricity charges introduced over the past two years and those planned for the next two years — was or will be

implemented without full compliance with the applicable statutory and procedural requirements, the municipality may be exposed to claims that consumers were charged under an unlawful tariff framework.

In such circumstances, affected consumers may potentially seek appropriate remedies under the Promotion of Administrative Justice Act or other applicable legislation, which could include the review and setting aside of the relevant decisions and the consideration of appropriate financial remedies.

Based on available information and analysis, it appears likely that the introduction of fixed electricity charges was intended to compensate for declining municipal electricity revenue resulting from the increasing adoption of private solar generation.

We note that Director Steven Muller made the following statement in a presentation about the Cost of Supply study:

“The objective of a Cost of Supply study is to apportion all costs required to service customers among each customer category/tariff in a fair and equitable manner.”

However, the practical effect of the current tariff structure appears to raise several serious concerns and does not appear to align with this statement:

• Households that have made substantial investments in private solar generation are effectively penalised if they wish to remain connected to the municipal grid, due to the imposition of fixed charges irrespective of consumption.
• Most concerning is the disproportionate impact on lower-income households. Consumers who can only afford to purchase small amounts of electricity per month experience a much larger percentage increase in their electricity expenditure because fixed charges constitute a large portion of their bill.

The impact of fixed electricity charges on low-consumption households also raises broader concerns regarding equitable access to basic services. Municipal electricity tariffs should be structured in a manner that supports fair and reasonable access to energy, particularly for vulnerable households. Tariff structures that disproportionately burden low-consumption users risk undermining the principles of equitable service delivery contemplated in the Municipal Systems Act.

Given these concerns, and considering that electricity consumers may potentially have been charged under a process that may not have fully complied with legal requirements, we propose that:

• The current tariff approval process be suspended, and
• The Overstrand Municipality engages with OVAC, OCAN, and other affected stakeholders to establish a transparent and lawful way forward that acknowledges the financial pressures experienced by many ratepayers.

Should the Cost of Supply study not already be publicly available, please consider this correspondence as a request that the document be made available to the public. Failing this, we will consider submitting a formal request in terms of the Promotion of Access to Information Act.

In the interest of transparency, we would also appreciate written confirmation of:

• the date on which the Cost of Supply study was completed;
• whether and when it was published for public comment; and
• the exact council meeting at which the future (2026/2027), current (2025/2026) and previous (2024/2025) electricity tariff structures and fixed charges were formally approved.

Council and senior officials will no doubt be mindful that decisions taken in disregard of statutory requirements may expose the municipality — and potentially individual decision-makers acting outside their lawful authority — to legal review and associated consequences.

Constructive engagement with affected residents and civil society organisations would assist in restoring public confidence and ensuring that electricity tariffs are structured in a manner that is lawful, transparent, and socially equitable.

We look forward to your response.

Best regards
Anton Kruger (OVAC)