The R54 Billion Miscalculation - What It Means for Homeowners

South Africa’s electricity framework has been rocked by an error that could cost households dearly. In August 2025, the National Energy Regulator of South Africa (NERSA) confirmed a R54 billion miscalculation in its revenue decision for Eskom under the Sixth Multi-Year Price Determination (MYPD6). This was not a minor accounting slip. It has real consequences for property owners and tenants – anyone who pays an electricity bill.

What happened: the facts

• NERSA admitted that its original MYPD6 revenue decision underestimated certain costs for Eskom, particularly around how generation assets were treated.
  
• Eskom initially applied for R62.676 billion in additional revenue to make up its shortfall. NERSA rejected this full amount and settled on R54 billion after reviewing the application.
  
• The errors were not minor. NERSA Chairperson Thembani Bukula identified three main mistakes:
• 1. A clerical “version control” error leading to a R14.5 billion miscalculation in Eskom’s depreciation allowance for generation
  2. An additional R20 billion due to incorrect application of the rules for transferring “work under construction” assets into commercial operation.
  3. A failure to correctly apply the Depreciated Replacement Cost rule, using zero balances instead of rolling forward prior-year values.
     
• Crucially, reports suggest NERSA knew of the error before finalising its decision in January 2025, yet did not correct it before publishing its official “Reasons for Decision” in June.

Parliament’s Portfolio Committee on Mineral Resources and Energy put affordability in the spotlight, demanding answers from NERSA on how such a large miscalculation could happen and what safeguards will prevent a repeat.

The Democratic Alliance (DA) has referred the matter to the Public Protector, citing governance failures and technical weaknesses at NERSA. The DA’s complaint highlights the lack of transparency and calls for “consequence management” against those responsible.

NERSA has commissioned an independent audit to establish how the error occurred and to recommend remedial action and suspended a senior staff member who was responsible for oversight of the data-entry error. 

But for ordinary South Africans, already burdened with financial pressure, the result is still the same: higher electricity bills in the years to come.

What this means for tariffs & your electricity bill

Because of the settlement, Eskom will recover the R54 billion over time, which translates into higher electricity tariff increases than originally communicated:

Source: Polity 

*These increases are averages; your actual increase will depend on your usage, tariff category (Eskom direct or municipal) and when you consume electricity.

For example, a property owner who currently pays R2,000/month for electricity under a typical Eskom or municipal tariff, could be paying R160-R180 more per month once the new rates are applied (assuming usage remains the same).

Tenants will also feel it: landlords may pass through higher electricity costs via utilities or service charges. In rented houses or flats, if electricity is included in rent or partially recovered, expect adjustments.

Other consequences beyond the monthly bill:

• Budgeting pressure: Households will need to plan for bigger monthly bills, affecting how much they can allocate to insurance, rates, or maintenance.
• Municipal pass-throughs/reselling: Municipalities typically add their own mark-ups, meaning increases could be even steeper at local level.
• Low-income households: Indigent customers may be pushed further into energy poverty, cutting back on heating, cooling, or lighting.
• Incentives for efficiency and renewables improve: Rising tariffs strengthen the case for rooftop solar, batteries, solar water heating, geyser timers, LED lighting, and insulation.

Practical steps for homeowners & tenants

While much is beyond individual control, there are constructive actions you can take:

1. Understand your tariff structure: Find out if you buy electricity directly from Eskom or via your municipality.Check whether you are on prepaid, block tariffs or time-of-use, and assess your last year’s usage.
   
2. Forecast your future costs: Work on an increase of around 8.8% for 2026/27 and for 2027/28 and plan ahead.
   
3. Reduce electricity usage: Target high-consumption devices: geysers, heaters, pools and large appliances. Use timers, insulation and switch to LED lighting and energy-efficient appliances. If you are on time-of-use tariffs, schedule heavy usage for cheaper times.
   
4. Explore renewable & off-grid options: Rooftop solar with a hybrid inverter or battery backup is increasingly cost-effective.Solar water heating and solar lamps are practical alternatives.
   
5. Check for relief programmes: Register for indigent tariffs or free basic electricity if eligible.Make sure you are on the most cost-effective tariff for your household.
   
6. Advocate for transparency and accountability: Participate in municipal budget consultations.Support calls for greater oversight of NERSA and Eskom’s pricing decisions.
   

As CEO of Just Property, I believe this error by NERSA, while technical in nature, has serious consequences for everyday South Africans. All of us – homeowners, tenants, property investors – must brace for higher electricity bills over the next few years.

At the same time, this crisis presents an opportunity: to accelerate energy efficiency, invest in solar and smarter appliances, and push for more openness and fairness in electricity regulation. If we act now, we can reduce the pain. Because electricity isn’t just a utility, it’s a basic necessity. And the burden of mistakes should not fall unfairly on ordinary people.