Nersa's R54bn mistake forces higher tariffs on users

CONSUMERS are set to absorb the severe reverberations from the National Energy Regulator of South Africa's (Nersa) staggering R54 billion costs recovery, due to a calculation error.

- SIPHO JACK

This costly oversight means that electricity tariffs, which were initially set to rise by 5.4% in 2026 and 6.2% in 2027, will instead spike by 8.8% over the next two financial periods to compensate for the Nersa blunder.

The new tariffs, expected to take effect in the 2026/27 financial year and into the next term (2027/28), are three times higher than the anticipated consumer inflation rate.

Charles Hlebela, Nersa's spokesperson, confirmed the tariff hike decision in a statement released last week, which prompted immediate backlash from energy experts, political parties, and others.

Nersa had identified errors in its earlier price determination.

The revised tariff hike follows an out-of-court settlement with the power utility Eskom. It is steeper than the initially announced 5% and 6%.

This now allows Eskom to recover an additional R54bn over the next two financial years.

Energy expert Professor Samson Mamphweli characterised the mistake as indicative of profound incompetence within Nersa and suggested that no accountability would be enforced for those responsible for the gaffe.

"The nature and extent of the consequence management processes of Nersa are lacking," Mamphweli explained.

"There are provisions for errors, but the guidelines on how to address errors of this magnitude seem nonexistent."

This sentiment was echoed by Chris Yelland, another energy expert, who argued that the lack of competence and accountability within Nersa has led to this expensive mistake, which consumers must now bear.

"There are alternatives that Nersa could explore instead of putting the burden on consumers," he stated, highlighting the failure of regulatory oversight at a critical time.