Nersa faces backlash over R54bn Eskom error and hidden settlement

Key topics:Nersa admits R54bn error in Eskom tariff determination.Error could hike electricity tariffs nearly 9% in 2026–28.Civil groups slam secret settlement, demand transparency..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Myles Illidge.South Africa’s energy regulator appeared before Parliament on Wednesday, 10 September 2025, to explain the details of its R54-billion Eskom error, which could cost residents billions in the coming years.This comes after the National Energy Regulator of South Africa (Nersa) quietly settled with Eskom after the power utility challenged its sixth multi-year price determination (MYPD6) revenue decision.The regulator admitted to an error in its determination, in which it underestimated Eskom’s costs, which the utility could recoup in the 2026/27 and 2027/28 financial years.Nersa was called to answer for its error in Parliament. The regulator spotted the error as far back as January, but it was never corrected.Nersa executive Nomfundo Maseti explained that the regulator’s technical team had assured that the figures in its determination document had been revised, after which Nersa decided on the electricity tariff application.“The error is regrettable. It should not have happened. Additional quality assurance steps have been implemented,” said Maseti.“Further reviews by selected advisory forums will be implemented. The employees responsible for the errors will be held accountable.”.Read more:.Eskom adds 800MW to strengthen national grid.Nersa chair Thembani Bukula told Parliament that the person responsible for the error has been suspended.However, in a letter from the regulator to the Democratic Alliance’s Kevin Mileham, Bukula said the error hadn’t occurred due to incompetence. He said Nersa had made a clerical error.“This figure doesn’t constitute an additional allowance but, rather, represents the amount that should have been awarded originally,” he explained.Mileham dismissed the explanation, adding that his party “would not rest” until the officials responsible for imposing the R54-billion amount on the public are identified, exposed, and appropriately sanctioned.“Consequence management is not a suggestion; it is an absolute necessity,” said Mileham.“It is simply unacceptable that ordinary consumers are forced to pay for the ineptitude of state officials who continue to draw a salary.”Civil action organisations consulting legal teams.The revelation that Nersa had made the mistake and that Eskom could recoup an amount of R54 billion through electricity tariff hikes in the next two years sparked outrage among civil action organisations.The Organisation Undoing Tax Abuse (Outa) and AfriForum slammed the regulator’s secretive settlement with Eskom.Outa executive director Advocate Stefanie Fick said electricity is already becoming unaffordable for ordinary South Africans and businesses.“Increased tariffs mean a person has less cash available to buy groceries, and in some instances, it becomes a bread-and-butter issue: electricity or food,” she said.“Businesses close down, which doesn’t help the employment rate. Big business will leave South Africa to go to countries where it is easier to do business.”Nersa kept its settlement with Eskom quiet until the media exposed it. Fick said the secrecy is “unacceptable”, adding that the regulator’s decision-making process should be transparent.“When state organs act like this, it is never good news, and due to the trust deficit currently, we can’t help but think that something is wrong,” she said.“Outa is in the process of consulting our legal team. We need to intervene in this matter in the public interest.”AfriForum also slammed the secrecy surrounding the settlement, saying it undermines the principles of transparency, accountability, and protecting customers, which Nersa is constitutionally obligated to uphold.“AfriFourm questions the constitutionality of the National Energy Regulator of South Africa secretly settling tariff disputes with Eskom behind closed doors,” it said.According to the civil rights organisation, the settlement will likely increase electricity tariffs by nearly 9% in the 2026/27 and 2027/28 financial years..This article was first published by MyBroadband and is republished with permission

Nersa faces backlash over R54bn Eskom error and hidden settlement

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