How NERSA's mistakes could lead to higher electricity costs for South Africans
The National Energy Regulator of South Africa (NERSA) has admitted to making errors in its revenue decision for Eskom, a blunder that could see consumers paying more for electricity over the next three years.
The regulator acknowledged mistakes in its calculations for Eskom’s sixth Multi-Year Price Determination (MYPD6), including errors in depreciation and asset values. This resulted in a R54 billion shortfall that Eskom will now recover through a court-approved settlement.The deal means no extra price increases for 2025/26, but tariffs will climb higher than planned in the years ahead.
Instead of a 5.36% increase in April 2026, households and businesses will face an 8.76% hike. In 2027/28, the rise will be 8.83%, up from the originally announced 6.19%.NERSA said the phased increases were designed to soften the blow and avoid a drawn-out legal battle. Industry players have warned that these sudden changes undermine public trust and make it harder for households and businesses to plan.
“Consumers should not be penalised for calculation errors, nor should policies undermine households that are trying to reduce their reliance on Eskom,” said Rein Snoeck Henkemans, CEO of Alumo Energy.
“The current approach risks slowing the transition to affordable, sustainable energy at a time when South Africa needs it most.” Henkemans added that regulatory and tariff barriers discourage families from investing in rooftop solar.
“This is a crossroads moment. Solar should cut costs, not add hidden ones. With fair, transparent policies, households can save thousands of rands each year and South Africa can accelerate its energy transition. The alternative is a cycle of mistrust, stalled investment, and higher costs for everyone.”
Civil society groups have been harsher in their criticism. Sandra Dickson from STOP COCT said the mistake was more than a technical error.
“NERSA’s R54 billion miscalculation is more than a slip of the pen. It is a regulatory disaster. Ordinary South Africans, who had no hand in the mistake, are now forced to pay higher electricity tariffs to cover a shortfall created by poor oversight and a calculation error. This occurs at a time when the cost of living and rising municipal bills are already burdening households.This blunder will deepen inequality, erode disposable income, and fuel inflation as businesses pass the resulting rise in energy costs to consumers.”
She added that the fact the error was detected months before final approval but never corrected raises serious questions about competence, accountability and transparency within the regulator.
“Suspending one or two officials will not restore trust with the public. What is needed is a full audit of NERSA’s processes and stronger parliamentary oversight. Parliamentary oversight is dysfunctional to say the least. Put plainly, a regulator tasked with protecting the public interest has failed, and the price of that failure is now sitting squarely on the backs of consumers.”
NERSA maintains that the settlement balances Eskom’s need for financial stability with consumer protection. But critics warn that repeated tariff shocks, regulatory errors and unclear policies risk pushing more South Africans away from the grid and further eroding confidence in the country’s energy system.