R54 billion blow to Eskom

A South African court rejected a R54 billion ($3.2 billion) settlement between the nation’s energy regulator and electricity provider over a tariff-calculation mistake that would have seen power prices raised by more than previously permitted, Moneyweb reported.

The High Court in Pretoria handed down the ruling on Sunday, the Johannesburg-based website reported, citing court documents.

Judge Jan Swanepoel said the parties didn’t provide an explanation on how they arrived at the figure, and that the “compromise was little more than a thumb-suck,” News24 reported separately.

The entities reached the settlement in July after utility Eskom Holdings. challenged a January decision by the National Energy Regulator of South Africa on the scope of power-price increases starting April 1. The utility said it was entitled to 107 billion rand more in revenue.

While the regulator didn’t oppose the application, it entered into closed-door talks with the utility in July and granted increases of 8.76% for the year starting April 1 instead of the originally stated 5.36%.

The settlement would also have increased prices by 8.83% in the year starting April 1, 2027, rather than 6.19% previously stated. Eskom and Nersa weren’t immediately able to respond to requests for comment.

The court said the decision to settle without public participation was contrary to policy, and ordered the regulator to consult the public before making a final determination, Moneyweb reported.

At 8.76%, the power-price increase would have far exceeded the central bank’s inflation forecast for 2026. In its latest projections, the South African Reserve Bank sees headline inflation averaging 3.5% next year.

A lower tariff would hinder efforts to achieve its new 3% inflation target, which it expects to reach in the third quarter of 2028.