The National Energy Regulator of SA (Nersa) has suspended a senior staff member and ordered an independent audit after confessing to a R54bn “catastrophic” error in its calculations of Eskom’s revenue requirements used to set tariff hikes.
Appearing before a parliamentary committee on energy, Nersa chair Thembani Bukula said a staff member responsible for oversight of the data-entry glitch that shortchanged Eskom has been suspended. An independent audit has been commissioned to get to the root of the miscalculations and shore up the regulator’s internal controls.
The error was traced to a faulty depreciation and regulatory asset base inputs and flagged internally in January 2025 but never corrected. The R54bn clawback will be phased in over the next three years, driving average electricity increases to 9% next year and in 2027, up from the previously approved 5.4% and 6.2%.
“Our processes, as much as we thought that they were robust for the many years that they’ve been in place, have really failed us. Our auditing process and our process of ensuring the quality of the documents that get approved are at the level that’s required have partly failed us,” Bukula said.
“We come ... to say that we apologise for this error. It is regrettable and something that should not have happened.”
This is not Nersa’s first high-stakes blunder. Over the past decade, court challenges have exposed repeated miscalculations in its price determinations. Its Sasol gas tariff methodology was struck down by the Supreme Court of Appeal and Constitutional Court, and branded prima facie excessive by the Competition Tribunal in 2024.
Bukula’s comments in parliament come less than a week after Stats SA’s inaugural Cost of Living Report shone a harsh spotlight on electricity prices, which are both unaffordable and unavoidable for households.
The bungled calculations shortchanged Eskom by more than R100bn, but the utility reached an R54bn out-of-court deal with Nersa.
Electricity minister Kgosientsho Ramokgopa said: “This is a R54bn mistake. It’s huge. That’s a catastrophic mistake and I’m happy that the team is dealing with that, but it’s unfortunate that we are here.”
In response to criticism that the settlement was reached in secret, Nomfundo Maseti, who oversees electricity regulation at Nersa, said the regulator had no legal authority to revise its own decision without a court order and was therefore compelled to pursue a judicial review.
The agreement with Eskom must still be ratified by the court.
The Nersa bungle heaps pressure on President Cyril Ramaphosa’s plan to break up Eskom. The plan’s linchpin is the wholesale electricity market, which would open floodgates of private capital and let competing energy producers set prices.
The DA and SA Local Government Association (Salga) have criticised the settlement, warning that it will worsen affordability challenges and undermine municipal revenue. Salga has called for urgent reforms, including cost-reflective tariffs with safeguards for vulnerable households, accelerated restructuring of Eskom and a transparent cost-recovery framework.
Maseti told MPs that Eskom had initially proposed a settlement of R62bn, but Nersa accepted a lower figure of R54bn “to balance the financial sustainability of Eskom during the negotiation, as well as to make sure that consumers do not pay the total of almost R71bn”.
The Energy Intensive Users Group, whose members account for about 40% of national electricity consumption, has called for a review of the January tariff decision and urged Nersa to reconsider its pricing methodology and implementation.
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