Nersa’s R54bn blunder: Who pays the price and who gets punished after forensic investigation?

The blunder came to light following a miscalculation in the revenue calculation for 2025/26, specifically involving the second and third-year generation revenues, which resulted in billions in additional funds being allocated to Eskom. The Portfolio Committee on Electricity and Energy had already called Nersa in late 2024 to account for the discrepancy, and the regulator returned this week with answers – though not all of them satisfied lawmakers. Nersa Board Chairperson Thembani Bukula was candid about the regulator’s failings.

“It is a mistake that we never want to be associated with, but it’s a mistake we learn from,” he told the committee. The forensic investigation’s findings were damning. Investigators reviewed board minutes, key decisions and interviewed role players across the electricity determination process.

What they found pointed to a systemic breakdown: a failure to review and verify information, poor communication among key players, a pressurised working environment and, critically, potential negligence by individual officials. The calculation that led to this point is complex. After receiving Eskom’s application, Nersa applied its MYPD methodology and found that revenue based on the corrected Regulatory Asset Base (RAB), specifically the generation RAB, should have been an additional R76 billion.

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That figure was then adjusted down to R54 billion to prevent Eskom from receiving excessive revenues and returns. Bukula explained that Eskom’s own review of the application had identified a discrepancy of approximately R107 billion. “When assessing the determination, Eskom believed that if they applied their methodology based on the assumption that the first year of the RAB was calculated correctly, their application would amount to R107 billion,” he said.

Recognising that this would hand the utility excessive returns, Nersa settled on R54 billion as the portion to be returned to Eskom. The R54 billion will not be recovered all at once. It will be liquidated in phases: R12 billion in 2026/27, R23 billion in 2027/28, and R19.7 billion in subsequent years.

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