Nersa faces pressure over Eskom tariff error

PRESSURE is mounting on the National Energy Regulator of South Africa (Nersa) to explain a data input error in a recent tariff settlement with Eskom, a blunder that threatens to increase electricity costs for already struggling South African households.

The additional tariff hikes of 3.4% in 2026/27 and 2.64% in 2027/28 are expected to only intensify financial strain, compounding the increases already approved. 

The South African Local Government Association (Salga) has weighed that the new electricity increases risk pushing many households “further into hardship and deepening the crisis of affordability”. For municipalities, they said “the fiscal risks are severe”. 

Eskom was granted approved revenues of R384.6 billion (12.74% increase) for 2025/26, R409.5 billion (5.36%) for 2026/27, and R436.9 billion (6.19%) for 2027/28. However, on July 2, Eskom filed a judicial review to challenge the Energy Regulator’s decision, citing a R107 billion revenue shortfall between its application and the approved amounts.

For 2026/27, the additional increase will be 3.4%, resulting in a price increase of 8.76%. For the 2027/28 FY, the additional increase will be 2.64%, resulting in a price increase of 8.83%. 

“These tariff hikes are not just numbers on a page, they risk pushing households into deeper poverty, crippling municipal finances, and widening inequality,” said SALGA president, Bheke Stofile.

Salga said while it recognised the urgent financial challenges Eskom faces, “passing the cost of mismanagement, historic inefficiencies, and policy delays onto consumers cannot be the solution”. 

According to Nersa, Eskom’s judicial review application was assessed for both legal validity and its potential impact on consumers and the broader economy. While NERSA ultimately decided not to oppose the review based on legal advice and public interest considerations, “this decision did not imply acceptance of all the reliefs Eskom requested in its review application”. 

DA spokesperson for Electricity and Energy Kevin Mileham said they wrote to Nersa, for a “full, public explanation for the catastrophic R54 billion error made in Eskom’s recent tariff determination”. 

He said they also requested the chairperson of Parliament's Portfolio Committee on Energy and Electricity to convene an inquiry into NERSA's internal processes and its fitness to regulate the energy sector.

“It is completely unacceptable that NERSA's incompetence and Eskom’s years of mismanagement and corruption will now be funded by the public. This incident has shattered public confidence in the regulator,” he said. 

Eskom said the error was with Nersa and they would recover the shortfall over a few years. 

“Eskom confirms that as stated in NERSA’s official media release dated 27 August 2025, the National Energy Regulator of South Africa has acknowledged errors in its revenue determination for the Sixth Multi-Year Price Determination (MYPD6), that was already consulted on as per NERSA’s processes. 

“These errors primarily affected depreciation values and return on assets related to the Regulatory Asset Base (RAB) within the generation business . Eskom experienced a shortfall in revenue due to this error made by NERSA. This impacts its ability to provide a generation service. Eskom has negotiated a settlement agreement that allows for the phasing of the recovery of the shortfall over a few years,” Eskom said. 

Nersa said they would comment on the matter in due course. 

The regulator previously said it had identified errors that resulted in underestimation in certain components of Eskom’s application following an assessment of the power utility’s review application.

Cape Times