Hope on electricity tariff?

2013-11-18 00:00

WHILE it has emerged that Pietermaritzburg residents could be paying the highest electricity costs in the province, there is hope that the tariffs may yet be reduced.

Embattled Pietermaritzburg residents were shocked 10 days ago to learn that they faced a hefty electricity tariff increase. The Witness has learnt that following the council meeting and the public outrage, the National Energy Regulator of South Africa (Nersa) was reviewing the Msunduzi tariff scenario. It has called for more documents, which were to be delivered by Friday.

Pietermaritzburg Chamber of Business CEO Melanie Veness also confirmed that a review was under way. She discovered this when she contacted Nersa to ask why they had recommended such massive hikes in the basic charges for small businesses. This, after Nersa refused to grant Msunduzi a 10% tariff increase, pegging the amount at seven percent.

Nersa spokesperson Charles Hlebela told The Witness that Msunduzi Municipality’s electricity tariffs were currently under discussion. He said a formal communication will be issued once all issues are resolved.

Pietermaritzburg residents learnt after a city council meeting that basic electricity charges in the city were to be increased — per order of Nersa. Hardest hit was the commercial sector, which faced a 1 200% hike, from R49,22 to R661,35.

Meanwhile, the Pietermaritzburg Agency For Community Social Action (Pacsa), after analysing data on the Nersa website, is convinced Msunduzi has the highest tariffs in the province.

Pacsa’s analysis showed that Pietermaritzburg was the highest even before the basic charge for small businesses was increased to R661,35. What swings the city’s tariffs upwards, is the widely criticised MCB charge (also known as a demand charge). Pacsa’s researcher Julie Smith has questioned whether the MCB charges were factored in during Msunduzi’s tariff negotiations with Nersa.

The Pacsa analysis looked at commercial tariffs 2013/14 for small businesses. It found:

• When all electricity costs as per Nersa’s data (basic R661,35 + usage + 80 amp MCB charge) were added up, Msunduzi came out at an amount of R2 681,21.

• This was R936,76 more than the KZN municipality with second highest commercial electricity charges — Umuziwabantu (Harding) at R1 744,45.

• The municipality with the third highest tariff was Emadlangeni (Utrecht) at R1 696,40.

• Msunduzi’s commercial tariff was R1 313,49 more expensive than eThekwini’s, which was R1 367,72.

Had the municipality left its basic charge for small businesses at R49,22 instead of increasing it to R661,35, then the total electricity charge [R49,22+usage R678,50+MCB R1341,36 (80amp)] would be R2 069,08. This was still the highest in KZN. So, Msunduzi already had the highest electricity charges in KZN even before the basic charge was raised to R661,35.

According to the Nersa table the only other municipalities — Hibiscus and Umvoti — which have MCB charges like Msunduzi do not also have basic charges. Msunduzi appears to be the only municipality in KZN that charges an MCB and a basic charge. Msunduzi’s MCB charge is also significantly more expensive than Hibiscus and Umvoti (R16,767 per amp vs R8,31 and R4,86 respectively).

Breaking down the tariffs, Msunduzi has the lowest usage charge (per kwh) (R0,68 per kwh) compared to other KZN municipalities. It is much better for the usage charges to be higher as this allows residents to make savings by using less electricity.

Msunduzi residents were already paying 43 to 44% of their bill as a fixed charge and would have to switch off many more appliances; virtually living with using very little electricity to make effective savings on their electricity bills.

If the MCB charge were removed, Msunduzi’s commercial tariffs would be competitive. Msunduzi’s final tariff — basic and usage — is R1 339,85 compared to eThekwini’s R1 367,72.

The municipality’s response:

MSUNDUZI Municipality was asked to comment on the Pacsa analysis and was sent the data on Friday. Municipal spokesperson Brian Zuma responded yesterday: “We are meeting tomorrow [Monday] to analyse figures as informed by the sources you have provided, and be in a position to give you and the public our position as informed by the facts that we will release after our meeting tomorrow. You will appreciate that it’s the weekend and on a serious matter like this, we have to provide you with a well-informed answer after we have interrogated the same sources that you have drawn from.”

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