For 15 months, the National Energy Regulator of South Africa (Nersa) has resisted all efforts to force transparency over discounted pricing deals given to seven large industrial users, including Glencore and ArcelorMittal South Africa.
Now, NGO Open Secrets has complained to the Information Regulator, asking it to direct Nersa to provide unredacted copies of the negotiated pricing agreements struck with the aluminium and ferrochrome smelters between 2020 and 2025.
It is instructive of Nersa’s dismissive attitude to a public which must ultimately act as guarantor for its decisions. In essence, these pricing deals are huge subsidies given to some of the largest corporations in the country, and cross-subsidised by the chunky price increases that Eskom has forced onto the rest of us.
Since 2008, the average South African has had to shoulder electricity tariff hikes of 907%, many times the estimated 140% inflation over those years. For their trouble, they have battled persistent blackouts, which have felled businesses and cost jobs.
Besides the tin ear that this secrecy demonstrates for the public anger over power, it reveals that winning back public trust is evidently pretty low on Nersa’s agenda.
The battle began in May 2025, when Open Secrets first submitted a request under the Promotion of Access to Information Act (Paia). Nersa replied promptly enough, sending those seven agreements — but redacting all the relevant details that would allow for a real understanding of what had happened. Conspicuously, it blacked out the exact price of the electricity being sold, how it was determined, the escalation and demand certainty clauses, as well as the supposed benefits to the economy.
Yet this is vital missing information. Based on what we do know, Meridian Economics estimates that just the pricing deals for Glencore-Merafe and Samancor chrome producers could cost Eskom — and thus the fiscus — more than R16bn every year.
There’s a long history of these sorts of pricing deals.
In 2025, following a similarly long battle to access an earlier agreement between Eskom and South32’s Hillside Aluminium smelter, an Open Secrets investigation revealed that the smelter had received a R92bn discount on power prices over 10 years.
Eskom and Nersa argued that these discounts are worth it because of the economic benefits that smelters and large industrial users provide, including jobs.
Yet they refuse to allow the public to verify this claim, insisting that the information about how those prices were calculated, the effect of them on the public and the supposed benefits all remain “confidential”.
Now, there might indeed be good reasons for providing pricing support and subsidies to South African industries, particularly if it protects jobs. However, it is vital that these decisions are made in an open and transparent way. Without that, it’s impossible to determine if the decisions are rational, fair and equitable.
This is especially true because decisions about electricity pricing are complex and require a full assessment of the opportunity cost of supplying significant amounts of the grid’s energy at huge discounts.
Put simply, it is not enough for Nersa to claim an industry provides jobs and needs a discount to continue operating. Nersa and Eskom ought to work out the economic benefit of supplying the same power to new or other customers, and how other industries might benefit from price relief. Why should other consumers not get the same benefit?
Electricity minister Kgosientsho Ramokgopa claims that Eskom is absorbing the loss from these pricing deals by selling its current excess capacity. Yet without the details, who is to say whether this is just an empty statement..
Once bitten
There is reason to be wary too, given Nersa’s poor track record.
Just last year, the regulator admitted to a R54bn “miscalculation” of Eskom’s allowable revenue, and then tried to hide the error by entering a secret settlement with Eskom after the utility went to court.
The Pretoria High Court set aside that secret deal, finding that the R54bn figure appeared to be a “thumb-suck” from Nersa, and that it wasn’t clear whether the regulator even knew what the actual figure should be.
“Nersa was clearly embarrassed by its mistake. Its purpose in entering into the agreement was, at least partially, to avoid public scrutiny of its error. It also wished to avoid judicial scrutiny and a just and equitable order that may not have suited it,” the court said.
Given this history of basic errors and desire to shield itself from view, it is even more pressing that Nersa’s assessment of pricing discounts be open to scrutiny. Open Secrets’ challenge seeks to ensure the public’s access.
As it is, Nersa has already replaced the pricing deals that we have demanded sight of with other new — and even more generous — discounted deals.
In particular, it has struck a deal to provide power to the chrome smelters run by Glencore-Merafe and Samancor for just 62c/kWh. This is less than a third of the 192c/kWh that other large industrial customers are charged, and a fraction of the 450c/kWh that many South African households pay for power.
Systemic secrecy
This long legal battle to access pricing deals which affect every South African is reflective of a systemic problem of obtaining information from public entities. In many instances, these entities drag the processes out for so long that by the time access is granted, their documents are no longer relevant.
This problem is particularly acute in the energy sector. Here, both public and private bodies often cite “commercial sensitivity” as grounds for refusing an access to information request, without any solid justification. It’s not just Open Secrets; other civil society organisations have noted this trend too.
Our courts have acknowledged, however, that “commercial sensitivity” must be grounded in reality, and not simply because it creates “discomfort” for a company when the information emerges, or which creates “reputational harm”.
Worse: public bodies regularly deny access to documents when the Information Regulator and even courts have already held that the same type of document must be released in the public interest.
This is the case with the current fight against Nersa, since the Information Regulator had ordered Eskom to provide Open Secrets with its pricing agreement with South32’s Hillside Smelter.
It means media houses and civil society groups have little choice but to spend a great deal of time and money battling to access information that should already be public, frustrating efforts to pursue transparency, and ultimately accountability.
This is far from an arcane corporate dispute.
At a time of intersecting energy and economic crises, it is paramount that the state’s response — including cutting deals for multinationals — is done transparently. People need to be able to assess whether the deals are made legitimately in the public interest, or just another gift to corporations at their expense.
