1. Introduction

Electricity regulators occupy a distinctive position in modern administrative law. Bodies such as the Gas and Electricity Markets Authority (GEMA)/Ofgem in the United Kingdom, NERSA in South Africa, and equivalent regulatory institutions in Australia, Canada and other common-law jurisdictions exercise substantial statutory powers over licensing, tariffs, network access, market rules, reliability, investment and consumer protection.

Because electricity regulation involves complex economic, engineering and policy judgments, courts generally recognise a degree of institutional expertise and regulatory discretion. However, regulatory expertise does not place electricity regulators beyond judicial review. Courts continue to supervise legality, procedural fairness, jurisdiction, rationality, relevant considerations and compliance with statutory purposes.

The central question is therefore not whether courts can review electricity regulators, but how intensely they should review particular regulatory decisions.

2. Meaning and Purpose of Judicial Review

Judicial review is primarily concerned with the lawfulness of the decision-making process and the legal boundaries of regulatory power, rather than substituting the court's preferred regulatory policy for that of the specialist regulator.

Traditional common-law judicial review developed around three principal ideas:

Legality – the regulator must act within the powers granted by Parliament.

Procedural fairness – affected persons must receive a fair decision-making process.

Rationality/reasonableness – regulatory decisions must satisfy applicable standards of rationality or reasonableness.

Modern administrative law has expanded these principles to include proportionality in appropriate jurisdictions, legitimate expectations, statutory purpose, adequate reasoning, relevant considerations and constitutional requirements.

The UK Supreme Court has recently reaffirmed that judicial review is directed to determining whether a public authority has acted lawfully, including whether it had proper grounds for acting on the information available to it. (Supreme Court UK)

3. Why Electricity Regulators Require Special Judicial Treatment

Electricity regulation differs from ordinary administrative decision-making because regulators frequently deal with:

electricity tariffs;

wholesale-market design;

transmission and distribution networks;

generation licences;

renewable-energy integration;

grid congestion;

system reliability;

investment incentives;

price controls;

consumer protection;

balancing and ancillary services;

environmental objectives; and

technically complex economic models.

A court normally lacks the institutional capacity to reconstruct the regulator's economic model or determine the technically optimal electricity tariff.

Consequently, judicial review generally involves a distinction between:

questions of legality, which courts determine authoritatively, and

technical/economic policy choices, where greater regulatory latitude may be appropriate.

The distinction is particularly important in cases concerning price controls, network revenues and electricity-market regulation.

4. United Kingdom

The UK provides one of the clearest examples of common-law judicial review of electricity regulation.

Ofgem operates within the statutory framework established principally by the Gas and Electricity Markets Authority, the Electricity Act 1989, the Utilities Act 2000 and subsequent energy legislation.

Judicial review may challenge:

licensing decisions;

enforcement decisions;

regulatory codes;

price-control decisions;

consultation procedures;

interpretation of statutory duties;

competition-related decisions; and

failures to perform statutory duties.

A. R v Panel on Takeovers and Mergers, ex p Datafin

Although not an electricity case, R v Panel on Takeovers and Mergers, ex p Datafin plc [1987] QB 815 is fundamental to modern UK judicial review.

The case demonstrated that a body may be subject to judicial review where it performs public functions even if its legal form is not that of a traditional statutory authority.

The principle is relevant to electricity regulation because modern energy governance frequently involves regulators, code administrators and other bodies exercising functions with significant public-law consequences.

5. Legality and Ultra Vires

The first question in reviewing an electricity regulator is whether it has acted within its statutory authority.

A regulator cannot:

exercise a power Parliament has not granted;

impose obligations beyond its statutory mandate;

use a statutory power for an improper purpose;

disregard mandatory statutory requirements; or

effectively rewrite legislation through regulatory action.

The doctrine is traditionally expressed through the ultra vires principle.

R (Miller) v Secretary of State for Exiting the European Union

Although not an electricity case, R (Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5 illustrates the constitutional importance of statutory authority.

For electricity regulators, the underlying principle is straightforward: important regulatory consequences must have a lawful statutory foundation.

6. Irrationality and Reasonableness

A regulator's decision may be challenged where it falls outside the range of legally permissible decisions.

The traditional UK authority is:

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223

The famous Wednesbury principle permits intervention where a decision is so unreasonable that it falls outside the lawful discretion of the decision-maker.

In energy regulation, however, applying rationality review requires particular care.

A tariff methodology may involve:

forecasting;

statistical assumptions;

capital-cost calculations;

depreciation;

financing costs;

demand projections;

network losses; and

future market conditions.

Courts ordinarily do not replace the regulator's model with their own merely because another methodology could have been adopted.

7. Relevant and Irrelevant Considerations

Electricity regulators must consider matters which Parliament has required them to consider.

For example, statutory duties may require consideration of:

consumer interests;

security of supply;

environmental objectives;

competition;

economic efficiency;

network investment;

affordability; and

protection of vulnerable consumers.

Failure to consider a mandatory factor may make the decision unlawful.

Conversely, reliance upon an irrelevant consideration may also invalidate the decision.

The principle derives from cases such as Associated Provincial Picture Houses v Wednesbury Corporation and Padfield v Minister of Agriculture, Fisheries and Food [1968] AC 997.

Padfield

Padfield established that statutory discretion must be exercised to advance the purposes of the legislation rather than frustrate them.

This is particularly important for electricity regulators because their statutory discretion is often extensive but purpose-defined.

8. Procedural Fairness

Electricity regulation frequently affects multiple stakeholders:

generators;

electricity suppliers;

network companies;

industrial consumers;

households;

renewable-energy developers;

municipalities; and

investors.

Consequently, consultation and procedural fairness are particularly important.

A regulator may be required to:

give affected parties sufficient notice;

disclose the essential basis of its proposal;

permit meaningful representations;

consider those representations;

comply with statutory consultation requirements; and

provide adequate reasons where required.

R v Secretary of State for the Home Department, ex p Doody [1994] 1 AC 531

Doody is a leading authority concerning procedural fairness and the circumstances in which reasons may be required.

Its principles are relevant to energy regulators where decisions materially affect regulated companies or consumers.

9. Regulatory Expertise and Judicial Deference

One of the most important features of electricity-regulation litigation is judicial deference.

Deference does not mean immunity from review.

Instead, it recognises that Parliament has entrusted certain technical questions to specialist institutions.

A court may therefore ask:

Was the regulator legally entitled to make this decision and did it follow a lawful, rational and fair process?

rather than:

Would the court itself have designed the electricity tariff differently?

This distinction is particularly important in price regulation.

10. South Africa: NERSA

South African jurisprudence provides particularly valuable examples because NERSA operates within a constitutional administrative-law framework.

The National Energy Regulator Act 2004 expressly provides for judicial review of administrative action by the Energy Regulator under the Promotion of Administrative Justice Act 2000 (PAJA). The statutory framework also requires NERSA decisions to be consistent with the Constitution and applicable law, within its statutory powers, procedurally fair, and based upon recorded facts, evidence and reasons. (SAFLII)

This makes South Africa an important comparative common-law jurisdiction.

11. NERSA v Borbet SA

National Energy Regulator of South Africa v Borbet SA (Pty) Ltd [2017] ZASCA 87

This is one of the most important cases concerning judicial review of an electricity regulator.

The dispute concerned NERSA's treatment of Eskom's Regulatory Clearing Account application under the applicable multi-year price-determination framework.

NERSA argued that courts should exercise considerable judicial deference because the regulator possessed specialised expertise.

The Supreme Court of Appeal nevertheless emphasised that judicial review remains available under PAJA.

The court recognised that the complexity of regulatory decision-making does not justify simply "rubber-stamping" an unreasonable decision. (SAFLII)

Significance

The case demonstrates an important balance:

Regulatory expertise → judicial respect

but

Regulatory expertise ≠ judicial immunity.

A court can intervene where the decision fails the applicable standards of legality, rationality or reasonableness.

12. Bato Star Fishing v Minister of Environmental Affairs

Although not specifically an electricity case, Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs [2004] ZACC 15 is extremely important for energy-regulation litigation.

The Constitutional Court recognised that courts should respect the expertise of specialist administrative bodies when dealing with complex, policy-laden and polycentric questions.

This principle has considerable relevance to NERSA.

It means that judicial review should not become a disguised appeal on the merits.

However, deference remains subject to constitutional legality and administrative-law standards.

13. PG Group Ltd v NERSA

PG Group Ltd and Others v NERSA [2018] ZASCA 56

This case provides another important example.

The Supreme Court of Appeal emphasised that administrative decisions must be rationally connected to:

the purpose for which the decision was taken;

the empowering legislation;

the information before the regulator; and

the reasons given by the regulator.

It also referred to the statutory reasonableness standard under PAJA. (SAFLII)

Importance

PG Group demonstrates that courts can scrutinise the logical relationship between:

evidence → regulatory reasoning → statutory objective → final decision.

This is particularly significant where electricity regulators make complex tariff or licensing decisions.

14. Organisation Undoing Tax Abuse v NERSA

In Organisation Undoing Tax Abuse (OUTA) v NERSA [2016] ZAGPPHC 479, the High Court dealt with the statutory framework governing NERSA decisions and judicial review. The legislation expressly contemplates review proceedings against administrative action by NERSA. (SAFLII)

The case illustrates the importance of:

reasons;

statutory procedures;

administrative records; and

the distinction between review and appeal.

15. Recent South African Development: AfriForum v NERSA

A significant recent example is AfriForum NPC v NERSA [2025] ZAGPPHC 1305, decided in December 2025.

The litigation concerned persistent delays in NERSA's municipal electricity-tariff approval process.

The court recognised that judicial deference protects the specialist role of regulators but held that deference cannot amount to judicial passivity where statutory and constitutional duties are repeatedly not performed. (SAFLII)

The case is significant because it demonstrates that judicial review can address not merely the substantive content of an individual regulatory decision but also systemic administrative failure.

16. Australia

Australian electricity regulation operates within a highly developed administrative-law environment involving institutions such as the Australian Energy Regulator (AER) and the Australian Energy Market Commission.

Australian courts have traditionally distinguished between:

questions of statutory interpretation;

jurisdictional error;

procedural fairness; and

review of discretionary or technical regulatory judgments.

The ADJR Act 1977 (Cth) and constitutional jurisdictional-error principles are important components of the framework.

A major theme of Australian administrative law is that jurisdictional error cannot be insulated merely by describing a decision as discretionary.

Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476

The High Court confirmed the constitutional significance of judicial review for jurisdictional error.

Although not an electricity case, its principles are relevant to regulatory institutions exercising statutory powers.

17. Canada

Canadian electricity regulation is generally undertaken by provincial regulatory commissions, reflecting the constitutional division of powers.

Judicial review traditionally focuses on:

statutory authority;

procedural fairness;

reasonableness;

jurisdiction;

statutory interpretation; and

respect for specialised administrative decision-makers.

Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65

Vavilov significantly reorganised Canadian judicial review doctrine.

The Supreme Court established reasonableness as the presumptive standard for reviewing administrative decisions on their merits, subject to recognised exceptions.

For electricity regulators, this means that courts examine whether the regulatory decision is justified, transparent and intelligible within the statutory and factual context.

The Canadian approach is particularly relevant to electricity tariff and licensing decisions because regulators frequently exercise highly specialised statutory mandates.

18. New Zealand

New Zealand similarly applies common-law judicial-review principles to specialist regulators.

Relevant grounds include:

illegality;

improper purpose;

failure to consider relevant matters;

procedural unfairness;

irrationality;

unreasonableness; and

statutory non-compliance.

The courts generally recognise that specialist regulators possess institutional expertise, while maintaining judicial authority over legality.

This creates a familiar common-law balance:

expertise and discretion on one side; legality and accountability on the other.

19. Judicial Review of Electricity Tariffs

Tariff decisions are among the most difficult areas of regulatory review.

A tariff decision may involve competing interests:

Courts generally avoid deciding what the "correct" tariff should be.

Instead, they may examine whether:

the regulator applied the correct statutory test;

mandatory considerations were addressed;

the methodology was rational;

evidence supported the conclusions;

affected parties were heard;

reasons were adequate; and

the decision fell within the statutory powers.

Borbet and PG Group illustrate this approach in South Africa. (SAFLII)

20. Licensing Decisions

Electricity regulators frequently grant, modify or revoke licences.

Judicial review may arise where:

the regulator exceeds its licensing jurisdiction;

statutory licensing criteria are ignored;

procedural fairness is denied;

irrelevant considerations influence the decision;

discriminatory treatment occurs without lawful justification; or

reasons are inadequate.

Because licensing can determine whether a company may participate in an electricity market, courts treat legality and procedural fairness seriously.

Nevertheless, where legislation gives the regulator a broad evaluative discretion, courts normally avoid replacing the regulator's technical assessment with their own.

21. Electricity-Market Rules

Modern electricity markets rely upon detailed regulatory codes concerning:

balancing;

transmission access;

connection;

congestion;

dispatch;

capacity mechanisms;

ancillary services;

renewable-energy integration; and

market settlement.

Judicial review becomes particularly complex where a challenge effectively asks the court to redesign the market.

Courts are more likely to intervene where there is:

statutory error + procedural failure + irrationality

than where the complaint is simply:

"the regulator selected the wrong economic model."

22. Proportionality

In some common-law jurisdictions, proportionality has become an important ground of review, especially where fundamental rights are implicated.

A proportionality inquiry may ask whether:

the regulatory objective is legitimate;

the measure is rationally connected to that objective;

less restrictive alternatives were reasonably available; and

the overall impact is proportionate.

However, proportionality is not applied identically across common-law jurisdictions.

The intensity of review depends upon:

statutory context;

constitutional framework;

affected rights;

institutional competence; and

nature of the regulatory decision.

23. Separation of Powers

Electricity regulation creates a particularly important separation-of-powers issue.

Legislatures establish the legal framework.

Regulators implement that framework.

Courts supervise legality.

Judicial review should therefore not transform courts into substitute electricity regulators.

At the same time, separation of powers cannot be interpreted to mean that regulators are immune from judicial control.

The South African jurisprudence makes this particularly clear: respect for specialist regulatory institutions coexists with judicial responsibility to enforce constitutional and statutory requirements. (SAFLII)

24. Remedies

Courts have several possible remedies where an electricity regulator acts unlawfully.

1. Quashing order

The unlawful decision is set aside.

2. Mandatory order

The regulator may be directed to perform a statutory duty.

3. Declaratory relief

The court declares the legal position without necessarily substituting a decision.

4. Remittal

The matter is returned to the regulator for lawful reconsideration.

5. Structural remedies

In exceptional circumstances, courts may supervise compliance with continuing statutory or constitutional obligations.

The recent AfriForum v NERSA litigation illustrates the potential relevance of structural relief where recurrent regulatory delays cause systemic consequences. (SAFLII)

25. Comparative Principles

The common-law jurisdictions reveal substantial convergence.

26. Key Case Laws

United Kingdom

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 – irrationality.

Padfield v Minister of Agriculture [1968] AC 997 – statutory purpose and improper exercise of discretion.

R v Secretary of State for the Home Department, ex p Doody [1994] 1 AC 531 – procedural fairness and reasons.

R (Miller) v Secretary of State for Exiting the European Union [2017] UKSC 5 – statutory authority and constitutional legality.

R (McAleenon) v Information Commissioner/related regulators [2024] UKSC – contemporary discussion of judicial review of regulators and alternative remedies. (Supreme Court UK)

South Africa

Bato Star Fishing (Pty) Ltd v Minister of Environmental Affairs [2004] ZACC 15 – deference and specialist expertise.

OUTA v NERSA [2016] ZAGPPHC 479 – judicial review of NERSA. (SAFLII)

NERSA v Borbet SA [2017] ZASCA 87 – rationality, reasonableness and regulatory expertise. (SAFLII)

PG Group Ltd v NERSA [2018] ZASCA 56 – rational connection and reasonableness. (SAFLII)

AfriForum NPC v NERSA [2025] ZAGPPHC 1305 – judicial deference, systemic delay and structural relief. (SAFLII)

Canada

Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 – modern reasonableness review.

Dunsmuir v New Brunswick, 2008 SCC 9 – foundational modern Canadian administrative-law framework.

Australia

Plaintiff S157/2002 v Commonwealth (2003) 211 CLR 476 – constitutional protection of judicial review.

Kirk v Industrial Court of New South Wales (2010) 239 CLR 531 – jurisdictional error and judicial supervision.

27. Conclusion

Judicial review of electricity regulators in common-law jurisdictions reflects a fundamental compromise between regulatory expertise and the rule of law.

Electricity regulators require substantial discretion because electricity markets are technically complex, economically interconnected and rapidly changing. Courts therefore generally avoid substituting their own views for specialist regulatory judgments concerning tariffs, network investment, market design or technical methodologies.

However, deference is not immunity.

Courts retain authority to ensure that electricity regulators:

act within statutory powers;

pursue the purposes of their legislation;

consider legally relevant matters;

disregard irrelevant considerations;

follow mandatory procedures;

provide meaningful procedural fairness;

base decisions on rational evidentiary foundations;

give adequate reasons where legally required; and

comply with constitutional and administrative-law standards.

The modern position can therefore be expressed as:

Courts ordinarily review the legality and rationality of electricity regulation without becoming the electricity regulator themselves.

The South African Borbet, PG Group and AfriForum decisions are particularly useful illustrations of this balance, while UK Wednesbury/Padfield/Doody, Canadian Vavilov, and Australian Plaintiff S157 demonstrate the broader common-law foundations. (SAFLII)