Following the outcry over the National Energy Regulator of South Africa’s (NERSA) approval of a miscalculated Eskom revenue application, the Portfolio Committee on Electricity and Energy summoned NERSA to explain the mishap and outline steps to ensure it does not happen again.
The committee found it hard to understand how this inaccuracy had evaded NERSA’s auditing and quality assurance processes. This forced the regulator to revise its initial approval, a decision that Eskom has now subjected to a judicial review. Giving the background to the miscalculation, NERSA Board Chairperson Mr Thembani Bukula said that it approved revenue of R384 610 million for the 2025/26 financial year (an increase of 12.74%), R409 524 million for the 2026/27 financial year (5.36% increase) and R436 860 million for the 2027/28 financial year (a 6.19% increase).
Subsequently, Eskom lodged the judicial review claiming that its generation division alone has a revenue shortfall of R107 billion, a figure that also turned out to be a miscalculation. When NERSA detected that error, Eskom asked for R62 676 billion. This NERSA refused to do and it revised its revenue application to R54 billion instead. Eskom then lodged a court order challenging NERSA’s decision. A court finding on the matter is still pending.
The committee asked how a R50 billion miscalculation could occur. Mr Bukula replied by saying that usually they come before the committee with their heads high, but in this instance, they come with their heads bowed. “There is a standard methodology of assessing Eskom’s revenue application. But it turned out that there was an error on its depreciation amount, assets transfer for commercial operations, and the cumulative balance principle was not applied for the general business, among others,” he explained. NERSA’s auditing processes and quality assurances failed due to lapses caused by changes in personnel with these responsibilities.
Members of the committee asked about NERSA’s consequence management processes in the wake of this embarrassing error in judgement. Mr Bukula said that one employee has already been suspended and there are ongoing internal investigations to determine others who may be culpable. He added that, if there was anything to be learnt from this error it is that there is a need for additional resources for NERSA to efficiently and effectively execute its mandate. “Our auditing and quality assurances value chain need to be improved and to have capable personnel with meticulous attention to detail to ensure that this does not happen again in future,” he said.
The Minister of Electricity and Energy, Mr Kgosientsho Ramokgopa, echoed his point, stating that given the evolving architecture of the energy sector there is a need to capacitate NERSA to complement its independence and to protect the end consumers and stakeholders. This is urgent in the light of NERSA’s responsibilities stipulated in the amendment bill of the Energy Regulation Act, which requires that NERSA is in a position to embrace the new complexities of the sector’s transition from monopoly to competition.
Committee members also called for electricity to be made more affordable. The Minister replied that currently electricity is expensive for everyone and the ministry is working hard to address this. “The pricing policy of electricity rests with me. And it’s my view that we can’t deprive people of electricity because access to it is not a mere privilege but a right: to education and access to information, among others.”
He also mentioned that the Electricity and Energy ministry has mapped a way of democratising the energy space and its tariff structure. “And if we can resolve that component, it would bring down the cost electricity. For, as things stand, electricity cost is untenable, hence a need for the revision of its pricing policy.”
Abel Mputing
11 September 2025
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