Tariffs rise, outrage follows, and the National Energy Regulator of South Africa (Nersa) insists the numbers are unavoidable; that’s the loop now defining our electricity debate. What has changed is the meaning.
Our electricity crisis has moved from whether Eskom can generate power to whether the referee still understands, and can credibly apply, the rules.
When tariffs are revised only after court intervention, when errors of tens of billions are corrected retrospectively, and when public participation alters nothing, the problem is institutional.
But the latest revision of Eskom’s allowable revenue should finally break the cycle.
Nersa’s admission that it miscalculated Eskom’s revenue by R74bn, correcting the error after a high court refused to rubber-stamp the settlement and sent the matter back into the open, is not an isolated technical slip.
It is the latest episode in a decade-long run pattern in which courts, tribunals and competition authorities have been forced to repair Nersa’s work. The Sasol gas tariff methodology was struck down by the supreme court, and in 2024, the Competition Tribunal described prices set under that framework as prima facie excessive.
That sequence is troubling. From methodological correction to a finding that regulatory design may have enabled market harm. Each intervention has chipped away at the authority of an institution meant to arbitrate some of the most consequential decisions.
Worse still, Nersa attempted to convert the Eskom dispute into a private settlement. AfriForum successfully challenged that approach in the Pretoria High Court, which refused to rubber-stamp the deal and sent the matter back for proper public participation.
The attempted settlement matters because it reveals efforts to sidestep scrutiny. In its court papers, the regulators plainly admitted to motive, saying a settlement “does not enable the ventilation of the details in an open court, which can expose Nersa further”.
That language reads less like prudence, a desire to resolve disputes quickly, than a confession that the regulator preferred secrecy over scrutiny. When a regulator seeks to negotiate outcomes behind closed doors, the public has every reason to suspect that the process has been subordinated to expediency.
What’s more, public participation followed only after litigation, and despite more than 2,000 submissions, the outcome remained unchanged. Consultation, it appears, has become procedural rather than substantive.
All of that matters because regularity is about legitimacy. A regulator that corrects itself only under judicial instruction, negotiates in private and treats public input as a formality forfeits the trust required to govern an economy.
The political backlash was almost immediate. The DA has vowed legal and parliamentary fights, pointing to the R54.7bn adjustment the high court dismissed as a “thumb suck” and warning of a compound 18% price shock over two years.
“This multibillion-rand hole in the utility’s books was not an act of God,” the DA said in a statement. “It was the direct result of Nersa’s inability to perform basic arithmetic…. It is irregular and unacceptable that the public is now being billed for the technical ineptitude of highly paid regulatory officials.”
We couldn’t agree more.
The economic consequences are already visible. Electricity prices have surged more than eightfold since 2008. Energy-intensive industries in mining, smelting and manufacturing now operate under permanent uncertainty, modelling not growth, but survival.
Spare a thought for the Reserve Bank’s monetary policy committee, which is forced to distinguish between inflation driven by demand and inflation imposed by regulatory error.
Nersa’s concessions to ferrochrome smelters last month acknowledged this reality. South Africa cannot speak credibly about reindustrialising while pricing electricity as if demand is optional. Nor can it pursue an energy transition without a regulator capable of explaining, defending and consistently applying its own methodologies.
South Africa has a regulatory trust problem. And Nersa is at its centre.
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