The Democratic Alliance has escalated the National Energy Regulator of South Africa’s (NERSA) R54 billion electricity pricing debacle to the Public Protector, demanding investigation into what DA spokesperson Kevin Mileham calls “one of the most staggering regulatory failures in recent memory.”
The formal referral comes just one day after NERSA appeared before Parliament’s Portfolio Committee on Energy and Electricity, where shocking new details emerged about the depth of the regulator’s calculation errors and institutional failures.
In a recent letter to the DA, NERSA Chairperson Thembani Bukula admitted to multiple fundamental errors that will see electricity tariffs rise to 8.76% in 2026/27 and 8.83% in 2027/28, far higher than the originally approved 5.36% and 6.19% respectively.
The errors include a R14.5 billion miscalculation due to a clerical “version control” error in Eskom’s Generation depreciation allowance, a further R20 billion correction required due to incorrect application of methodology for transferring assets from “work under construction” to commercial operation, and the Depreciated Replacement Cost rule being incorrectly applied in Generation using zero balances instead of rolling forward prior-year values.
“These are not minor oversights. They are fundamental breaches of the regulator’s core mandate,” Mileham stated.
NERSA knew but failed to act
Perhaps most damaging was the Portfolio Committee’s revelation that NERSA knew of the error before finalising its decision in January, yet failed to correct it before publishing the Reasons for Decision in June.
“This is a textbook case of maladministration,” the DA charged, accusing NERSA leadership of “passing the buck” by blaming employees while failing to take ownership of approving an incorrect determination.
ALSO READ: Electricity bills set to soar as NERSA settles R54 billion error with Eskom
Instead of defending its decision in court, NERSA chose not to oppose Eskom’s judicial review and quietly settled for the additional R54 billion behind closed doors, without any public consultation.
The DA’s referral highlights what it calls “deep institutional rot at NERSA,” pointing to governance failure where multiple layers of review failed to detect the error before the decision was finalized, a transparency deficit that excluded the public from a decision costing them billions, and capacity gaps that NERSA’s own remedial plan admits include skills shortages, weak quality assurance, and outdated regulatory tools.
Recovery timeline will burden consumers
The R54 billion will be recovered from consumers in phases, with R12 billion during the 2026/27 financial year, R23 billion during the 2027/28 financial year, and the remaining balance in the next Multi-Year Price Determination (MYPD) cycle.
“South Africans already face a cost-of-living crisis due to exorbitant electricity costs. We will not stand idly as Eskom and NERSA continue to rip the country off,” Mileham declared.
Beyond the Public Protector investigation, the DA is calling for fundamental reform including reconstitution of NERSA’s board with independent, technically qualified professionals, replacement of outdated mechanisms like the MYPD with performance-based regulation, implementation of statutory affordability thresholds and rigorous socio-economic impact assessments, and filling vacant posts without delay.
“We need a regulator fit for purpose in a modern energy economy,” the DA stated, stating that tariff decisions must “put consumers first.”
Pattern of regulatory failure
This latest scandal adds to NERSA’s troubled track record, including its previous illegal decision to deduct a R69-billion government equity injection from Eskom’s allowable revenue, a decision Eskom successfully challenged in court.
“The R54 billion debacle is not an isolated blunder; it is the clearest evidence yet that the system is failing the very people it is meant to protect,” Mileham said.
The Public Protector investigation will now determine whether criminal charges or further sanctions are warranted against officials responsible for the Nersa blunder.
NERSA has defended the settlement as ensuring Eskom’s “operational sustainability” while claiming to safeguard consumer interests.
ALSO READ: Municipal body slams energy regulator over electricity trading licences
