The National Energy Regulator of South Africa (NERSA) has admitted in writing to ‘clerical errors’ which has led to its catastrophic R54 billion settlement with Eskom that will see electricity tariffs rise far higher than originally approved, following pressure from the Democratic Alliance (DA).
In a letter directed to DA MP and spokesperson for electricity and energy, Kevin Mileham, NERSA Chairperson Thembani Bukula concedes to multiple errors in the regulator’s calculations that led to the controversial settlement agreed behind closed doors in July. The admission comes as Eskom’s electricity tariffs are now set to rise by 8.76% in April 2026 instead of the previously approved 5.36%, and by 8.83% in 2027/28 instead of 6.19%.
While attempting to downplay the failure by blaming a “clerical error” and “version control issue,” Bukula admits that a “remedial process has been initiated with the aim of ascertaining the origin of the errors and where appropriate, consequence management process will ensue to warrant accountability on this matter.”
Mileham described this as “an unambiguous admission that there are individuals within the regulator who must be held accountable for this costly failure.”
“‘Consequence management’ is not a suggestion; it is an absolute necessity,” Mileham said. “The DA will not rest until the officials responsible for imposing this R54 billion tax on the public are identified, exposed, and appropriate measures taken to sanction them.”
Parliamentary hearing scheduled
As a direct result of DA intervention and formal demands to Parliament, NERSA has been summoned to appear before the Portfolio Committee on Energy and Electricity on Wednesday, 10 September.
The controversy stems from NERSA’s settlement with Eskom over errors in the sixth multiyear price determination (MYPD6) revenue decision. Eskom had legally challenged the decision in July, arguing that calculation errors had left it with a R107-billion revenue shortfall.
NERSA’s own review identified errors resulting in an underestimation of Eskom’s application components, specifically:
- An error on depreciation amounts that created a R14.5-billion shortfall
- Another error relating to asset transfers that affected 2026/27 and 2027/28 financial years
The R54-billion settlement will be recovered in phases:
- R12 billion during 2026/27 financial year
- R23 billion during 2027/28 financial year
- Remaining balance to be addressed in the next MYPD cycle
Behind-closed-doors deal criticised
The settlement was notably conducted without public participation, with the discussion removed from a public NERSA electricity sub-committee meeting and moved to a closed session – a departure from the regulator’s typically public meetings.
NERSA’s Nomfundo Maseti has previously defended the agreement as “a fair and balanced resolution” that “safeguards the interests of South African electricity consumers while addressing Eskom’s legitimate revenue requirements.”
However, the DA maintains that “the South African public cannot be used as an ATM to fund the incompetence of Eskom and NERSA.”
This represents the latest in a series of successful legal challenges by Eskom against NERSA decisions, including the regulator’s previous illegal decision to deduct a R69-billion government equity injection from Eskom’s allowable revenue for 2020-2022.
The DA has vowed to continue fighting to ensure “those responsible are held accountable and that the public is protected from this kind of regulatory failure ever again.”
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