Court rejects Eskom and NERSA’s R54 billion closed-door settlement

The Pretoria High Court has rejected a bid by Eskom and the National Energy Regulator of South Africa (NERSA) to settle a multi-billion rand tariff dispute behind closed doors.

The proposed settlement sought to rectify a major error in Eskom’s revenue determination. However, the agreement attempted to bypass required investigations and public participation processes, which would have allowed the utility to recover at least R54 billion from consumers through substantial tariff increases.

The court has reviewed and set aside NERSA’s original revenue decision and refused to make the settlement agreement an order of court.

Consequently, NERSA is now required to redetermine the additional amount Eskom is entitled to following its initial accounting errors. Crucially, the regulator must provide the public with a formal opportunity to provide input before a final decision is reached.

AfriForum, which intervened in the matter in October, has hailed the judgment as a landmark ruling for consumer rights and administrative transparency.

“AfriForum was successful with its application to block the R54 billion settlement between Eskom and NERSA," says Morné Mostert, Manager of Local Government Affairs at AfriForum. "The court confirmed that NERSA and Eskom cannot make decisions behind closed doors that would burden the public with billions of rands in costs.”