South Africans could pay more for electricity after NERSA and Eskom reach R54bn settlement
South Africans could be in for a rude awakening after power utility Eskom and energy regulator NERSA announced they have reached a R54 billion settlement
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South Africans could be in for a rude awakening after power utility Eskom and energy regulator NERSA announced they have reached a R54 billion settlement over electricity price increases.
In a statement issued to the media, the energy regulator said the settlement comes after Eskom launched a judicial review challenging NERSA’s original revenue decision.
Earlier this year, NERSA granted the power utility approved revenues of R384.6 billion (12.74% increase) for 2025/26, R409.5 billion (5.36% increase) for 2026/27, and R436.9 billion (6.19% increase) for 2027/28.
"On 2 July 2025, Eskom lodged a judicial review of the Energy Regulator's decision in line with section 10(3) of the National Energy Regulator Act of 2004," the energy regulator said.
"Eskom sought to set aside the Energy Regulator's decision, citing a revenue shortfall of R107 billion, which is the difference between what Eskom applied for and what the Energy Regulator approved".
NERSA added that after a thorough review of Eskom’s claims, calculation errors were found that had underestimated Eskom’s allowable revenue by R54 billion.
The error stemmed from incorrect data inputs related to depreciation and the Regulatory Asset Base (RAB) in Eskom’s generation business.
"After rectifying these errors, NERSA concluded that Eskom was entitled to an additional R54 billion over the three-year MYPD6 period, an amount substantially lower than Eskom's original claim of R107 billion. The parties settled for R54 billion on 30 July 2025".
NERSA also stressed that "this is a judicial review consideration and cannot undertake the public participation process normally followed when considering applications".
"The settlement between Eskom and NERSA can only be effective after it has been made an order of the court, which has not yet been secured, and which has delayed the release of this media statement to avoid pre-empting the decision of the courts".
NERSA said it opted not to oppose Eskom’s court challenge after assessing the reliefs requested and considering the public interest, though it did not accept all of Eskom’s demands.
If approved, the R54 billion settlement will be phased over the coming years, with R12 billion recovered in 2026/27, R23 billion in 2027/28, and the remaining balance addressed in the next price determination cycle.
The settlement is expected to result in an additional 3.4% tariff increase in 2026/27.
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