One of South Africa’s most expensive mistakes put on hold
Lobby group AfriForum has managed to put a temporary hold on the R54 billion settlement agreement between Eskom and energy regulator, Nersa.
The agreement, announced by Nersa in August, came as a result of an error by an employee at the regulator who failed to update figures used to calculate Eskom’s clawback amounts in its MYPD6 application.
Nersa originally approved 5.36% and 6.19% price increases for 2026 and 2027, respectively.
However, after it admitted to errors in its depreciation and asset valuation for Eskom, the regulator agreed that the utlity could raise the additional R54 billion in those years.
This pushed the price hikes to almost 9% in both 2026 and 2027, with energy users footing the bill.
According to AfriForum, the Pretoria High Court was supposed to ratify the agreement on Tuesday (7 October), but the matter has now been moved to a contested roll.
This move now creates the opportunity for AfriForum and other interested parties to join the case as interested parties, it said.
AfriForum said that the settlement could be considered unlawful and unreasonable due to a lack of transparency involved with the process.
It said Nersa undermined public trust by attempting to conclude the settlement without public participation.
“This development is a victory for transparency and consumer rights. AfriForum will ensure that the public’s voice is heard and that Nersa and Eskom are held accountable for their decisions,” the group said.
The announcement by Nersa came as a complete surprise to power users, and the regulator said only that the situation was “regrettable”, by way of apology to the nation.
It also identified the party behind the error and initiated consequence management for what transpired.
AfriForum wrote to Eskom in September requesting that the case be removed from the uncontested roll of the court to the contested roll.
“Eskom opposed the request, arguing that AfriForum did not have the right to intervene and that the public did not have a veto right,” the group said.
According to Eskom, the settlement did not require public participation.
However, AfriForum argued that, should the settlement proceed uncontested, consumers would face rate increases of almost 9% per year in 2026 and 2027.
It added that the South African public is directly affected by the settlement and have to pay for it, and for Eskom to argue they have no interest in the matter shows “blatant arrogance”.
“Eskom and Nersa must act transparently and responsibly, especially after Nersa’s several tariff missteps and Eskom’s uncertain financial management,” the group said.
Eskom has pushed its operational inefficiencies and losses from corruption onto consumers for more than a decade through price hikes, pursuing a “farcical” cost-reflective tariff.
This has seen electricity tariffs shoot up over 800% since 2007, far above inflation over the same time.
Business leaders and energy experts have long pointed out that the process and methodology used by the utility to push its price hikes—which now includes the extra R54 billion—has been abused for years.
This includes costs like inflated pricing for common goods, delayed and over-budget power station builds, and the increased cost burning diesel, and the group’s bloated workforce.
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