Electricity winners and losers

2013-11-06 00:00

MSUNDUZI Municipality has finally settled on its electricity tariffs and businesses in the city are the biggest losers, with an over 1 200% hike in some cases.

In terms of yesterday’s decision in the council, commercial businesses — shops and offices — are going to face increases of over 1 200% and 900% respectively on their basic charges. Domestic users have won some reprieve, but will face domestic charge increases of 54% and 26% on what they are currently paying.

The increases are for basic charges, which excludes usage and the MCB charges.

The municipality held a special council meeting yesterday to adjust the council’s tariffs for the current financial year.

This was after the National Energy Regulator of South Africa (Nersa) turned down the council’s application to hike electricitytariffs by more than 10%. Nersa pegged the increase at seven percent.

Municipal officials appealed because budgets were affected. Nersa conceded that the council could hike its basic charges.

DA councillor Rodger Ashe said what was supposed to be good news about decreases in tariff hikes ended up being about massive and unexpected hikes for Pietermaritzburg’s electricity users.

The council decided yesterday to increase the commercial 80 amps basic charge from R49,22 to R661,35 and the commercial three phase (100 amps) from R86,14 to R861,80.

This should become effective after the January 2014 mid-year budget review.

Pietermaritzburg Chamber of Business (PCB) chief financial officer Melanie Veness said the charges were going to hit small businesses the hardest.

“This is the sector that the city relies on for job creation and these tariffs will result in jobs being lost,” she said, adding the cost was totally unexpected and companies were going to struggle to factor this into their monthly budgets. She would be contacting Nersa to find out how they had arrived at the basic cost increase, why they had suggested them and whether the suggestions were cast in stone.

Nersa had recommended that household basic charges could be increased to R200.

Speaker Babu Baijoo said that the council had decided to defy Nersa’s recommendation.

Instead, Mayor Chris Ndlela proposed that the domestic basic charge on 80 amps go up from R17,50 to R27,00 and the charge on 100 amps increase from R29,16 to R37,00.

The DA opposed the mayor’s proposal and councillor Mergan Chetty moved that that all tariffs across the board for both domestic and commercial be pegged at the seven percent increase recommended by Nersa.

Ashe asked for the proposals to be put to the vote. The ANC as the majority party voted for the mayor’s proposal. All the opposition parties voted for Chetty’s proposal.

Ndlela said that his suggestion allowed for both the balancing of budgets and taking care of the poorest of the poor in the city.

Chetty felt that the the mayor had proposed the amounts he did because these would help offset the extra three percent on user charges that the municipality had prematurely charged consumers.

He said businesses faced huge hikes because they were being punished for appealing to Nersa against the municipality’s initial application to increase its tariffs by 10%.

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