AfriForum has issued a letter of demand to Nersa and to Thaba Chweu Local Municipality, the Mpumalanga municipality that covers Lydenburg, Sabie and Graskop, over a R582.64 levy on networks that are available but not connected. The municipality has 19,294 electricity customers in total.

AfriForum says the charge is being applied to properties that generate all their own power and are not connected to the grid at all, and has given both parties 10 days to respond before approaching the High Court.

This is separate from the charges that already apply to grid-tied solar customers. The municipality also introduced a R321.11 monthly basic fee and a R10.92 access charge for small-scale embedded generation customers in July 2026, and those are the standard capacity charges utilities levy because grid-tied systems still draw on the network when batteries run down.

The disputed levy is the one aimed at properties with no connection. NERSA's own Reasons for Decision document explains the pressure behind it. The municipality is losing 53.16% of the electricity it buys, which the regulator says significantly undermines its financial sustainability. Bulk purchases cost R393.2-million against electricity sales revenue of R360.2-million, leaving about R33-million unrecovered.

NERSA calculated that capping losses at 12% would improve net profit by R25.7-million and generate R194-million in additional revenue. The municipality is in a four-year plan to align tariffs with the cost of supply.

BusinessTech reported the letter of demand and AfriForum's argument that the levy may be an unlawful tax, with no evidence of a lawful public participation process and open questions about whether it is supported by a cost-of-supply study. NERSA's Reasons for Decision document sets out the approval of the levy alongside the municipality's loss and deficit figures. AfriForum first wrote to the municipal manager on 20 July requesting the cost-of-supply study, public notices, council resolutions and records of public comments.

Worth being precise about the scope. This is a single municipality with fewer than 20,000 electricity customers, not a national solar charge, and it does not affect anyone outside that area. What makes it worth watching is the arithmetic in the regulator's own document.

A distributor losing 53.16% of what it buys is charging households that take nothing from it, while the regulator's own figures show that fixing those losses would raise R194-million, many times what this levy could recover. That is a distribution problem being billed to people who left.

The mechanism matters too, because the revised electricity pricing policy requires municipalities to justify costs through cost-of-supply studies, and that requirement is exactly what AfriForum is testing here.

You might also like our piece on the Eskom distribution agency agreements taking over failing municipal networks, why South Africa's business regulation is more restrictive than China's, and what the Big Mac Index rand figure says about local costs.

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