NERSA’s R54 Billion Blunder Balloons to R76 Billion

Statement by Kevin Mileham MP – DA Spokesperson on Electricity & Energy:

The Democratic Alliance (DA) has today written to the Chairperson of the Portfolio Committee on Electricity and Energy, requesting that the leadership of the National Energy Regulator of South Africa (NERSA) be urgently summoned to Parliament. This follows revelations that the regulator’s incompetence has again plunged South Africa into a crisis of escalating costs and legal uncertainty.

The DA has requested that the NERSA Chairperson and Full-Time Regulator Members appear before the Committee to account for two specific, systemic failures that threaten the financial stability of the energy sector and South African households:

1. Escalation of the “Clerical Error” In September 2025, NERSA admitted to a “clerical error” regarding Eskom’s revenue application, then valued at R54 billion. It has now emerged that this figure has not been rectified but has instead escalated to R76 billion. The DA notes with concern that in the four months since the initial admission, the financial discrepancy has deteriorated by a further R22 billion. The regulator is currently engaged in public consultations to recover this inflated amount from consumers. The DA contends that this points to a breakdown in internal financial controls and technical capacity within the regulator.
2. Unlawful Municipal Tariffs On 14 January 2026, the High Court (per Judge Anthony Millar) set aside NERSA’s tariff determinations for the City of Johannesburg, Ekurhuleni, Madibeng, and Msunduzi. The court found these determinations unlawful due to the absence of necessary Cost-of-Supply (CoS) studies.

The judgment orders NERSA to restart the determination process for these municipalities by 30 June 2026. Crucially, the court stipulated that should NERSA fail to meet this deadline, the municipalities must revert to tariffs from previous financial years. This ruling underscores a judicial lack of confidence in NERSA’s current compliance methodologies.

The DA’s request to the Committee demands that NERSA leadership, including Chairperson Thembani Bukula, account for:

• The methodology and specific calculations that led to the R22 billion escalation in the error.
• The status of the promised “consequence management” for the officials responsible.
• Why NERSA approved municipal tariffs based on flawed studies, leading to the court’s adverse ruling.
• The estimated financial impact on municipalities and consumers of rectifying these unlawful tariffs.

South Africans are now facing an assault on their wallets due to NERSA’s compound failures. On one front, consumers are being targeted to pay for a R76 billion mistake that NERSA cannot explain. On the other, millions of residents in major metros face massive uncertainty and potential retrospective billing because the regulator failed to ensure lawful Cost-of-Supply studies were in place.

In September 2025, NERSA admitted to ‘clerical errors’ and promised us consequence management. Instead of improvement, we have seen a deterioration of R22 billion in just four months and a humiliating judicial rebuke. This is not just negligence – it is gross incompetence that borders on sabotage of the economy.