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NERSA is re-calculating (redetermining) the value of Eskom’s Generation Regulated Asset Base (RAB) and the associated Allowable Revenue for the financial years 2025/26, 2026/27, and 2027/28.
This follows a High Court judgment that set aside NERSA’s previous decision (published June 2025) and a subsequent settlement agreement. The Court ordered NERSA to fix specific errors regarding depreciation and asset values and to consult the public again before making a final decision.
The consultation focuses only on the Generation business’s asset base and related costs. Specifically, NERSA is looking at:
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- Depreciated Replacement Cost (DRC): The current value of Eskom’s power plants.
- Depreciation: The cost of wear and tear on these assets.
- Transfers to Commercial Operation: New assets (like power stations) coming online.
- Work Under Construction (WUC): Capital spent on projects still being built.
- Net Working Capital: Operational cash flow needs.
- Asset Purchases: Buying new equipment.
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- Eskom’s Request: Eskom originally applied for a total of R302 billion in RAB-related revenue (returns + depreciation) over the 3-year period.
- NERSA’s Proposal: After correcting errors, NERSA proposes allowing R271 billion.
- The Gap: NERSA has made downward adjustments to Eskom’s figures, particularly regarding assets transferred to commercial operation and working capital.
Top concerns and questions
Context: The court ruling requires NERSA to increase the value of Eskom’s assets (the Regulatory Asset Base), which directly increases the electricity tariff.
Question: Given the current economic climate, do you accept a further increase in electricity tariffs to fund a higher valuation of Eskom’s power plants, or do you believe the asset values should be capped to keep electricity affordable?
Context: This redetermination decides which power stations are included in the price you pay. This includes aging plants and those prone to breakdowns.
Question: Should consumers be forced to pay higher tariffs to cover the full value of power stations that are near the end of their lifespan or frequently unavailable due to breakdowns (load shedding)?
Context: The proposed adjustments allow Eskom to recover billions from the public for “Work Under Construction” and daily cash flow (“Working Capital”).
Question: Do you agree that the consumer should carry the additional financial burden of funding Eskom’s incomplete construction projects and operational cash flow through increased electricity prices?
The full consultation paper
Published notice
In the News
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- BusinessTech — South Africans forced to pay for a R76 billion mistake
- Moneyweb — Nersa consults on R76bn additional revenue for Eskom from your pocket
- East Coast Radio — Public comment open on proposed Eskom tariff hike
- MyBroadband — South Africans on the hook for R76-billion Eskom blunder
- The Citizen — When corporate mistakes become your expense
SABC News South Africans will have to brace themselves for electricity price increases in 2026 and 2027. The increases will be higher than the tariff increases announced earlier in the year.
Cape Talk Africa Melane speaks to energy expert Matthew Cruise from IMPOWER as South Africans brace for possible electricity tariff hikes, with Nersa consulting on a proposed R76 billion revenue recovery for Eskom following admitted regulatory mistakes.
Newzroom Afrika Prof. Valli Padayachee speaks to Stephen Grootes about Nersa after it confirmed it miscalculated how much Eskom can charge for electricity.
Moneyweb ‘Any price increase above inflation is bad for the economy… the prices of goods and services go up because businesses pass on these prices to the consumers, which means that the households are hit hard almost twice,’ says Professor Sampson Mamphweli, South African National Energy Development Institute.
Statements and media releases
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