Court order confirming R54bn Nersa-Eskom settlement delayed following AfriForum intervention

The court order confirming the controversial R54-billion settlement between Eskom and the National Energy Regulator of South Africa (Nersa) has been delayed after the High Court granted AfriForum’s request to intervene as a respondent in the matter.

On August 27, Nersa announced that a settlement had been reached after agreeing that it had made calculation errors when adjudicating Eskom’s most recent allowable revenue application; one that gave rise to its approval of tariff increases of 12.74%, 5.36% and 6.19% for Eskom’s 2026, 2027 and 2028 financial years respectively.

Nersa also stated that, given that the settlement was the outcome of a judicial review, it could not undertake the usual public participation process, as the settlement could “only be effective after it has been made an order of the court”.

It also outlined the proposed disbursement of the R54-billion settlement, with R12-billion and R23-billion to be recovered during the 2027 and 2028 financially years, with the balance to be recovered during the next tariff determination cycle.

As a result, Nersa indicated that the tariff hikes for the 2027 and 2028 financial years would be about 3% higher than the increases approved previously, at 8.76% and 8.83% respectively.

The court order confirming the settlement was scheduled to be made on an unopposed basis on October 7.

However, AfriForum lodged an application for leave to intervene as a respondent on October 3 in which it argued that the decision by Nersa to settle the matter outside of the normal public participation process raised concerns about transparency and accountability.

“The general public cannot expect to bear the higher tariffs negotiated behind closed doors while their voices regarding impact and affordability are excluded,” the application reads.

Permission for such intervention was subsequently granted to AfriForum.

The unopposed matter is, thus, now being formally opposed and Eskom, Nersa and AfriForum will now participate in a court process.

Eskom and Nersa were said to be preparing answering affidavits, and Nersa chairperson Thembani Bukula told the Portfolio Committee on Electricity and Energy on October 15 that its papers were due to be filed by October 23.