Msunduzi hid vital charges from Nersa

2014-01-10 00:00

THERE was no mention of MCB — mini circuit breaker — charges in Msunduzi’s submission to the National Energy Regulator of South Africa (Nersa), hence the order for hefty increases in the basic tariff charges.

This is the view of tariff analyst Julie Smith of the Pietermaritzburg Agency for Community Social Action (Pacsa). Smith, like many other baffled Msunduzi citizens, was trying to make sense of why Nersa would contradict itself by limiting the municipality’s tariff increases to no more than seven percent and then ordering massive basic charge increases amounting to more than 900%.

Nersa remains mum on the issue so far, saying that Msunduzi’s application to review their tariffs was still under discussion. The municipality has said it has no choice and has a legal obligation to follow Nersa’s orders.

It has gone ahead and started charging the new rates, leaving small businesses reeling. Many have already claimed that they face closure or would have to retrench staff.

Smith told The Witness yesterday that Nersa makes its decisions on tariff increases based on the information it receives from municipalities.

She said that all the evidence pointed to Nersa appearing not to have considered Msunduzi’s MCB/AMP charge.

According to Smith, the energy regulator posts the details of its approved tariff list for 2013/14 on its website. Under Msunduzi, the MCB charge is not listed. The two other KZN municipalities that have MCB/AMP charges listed on the website are Hibiscus and Umvoti. They do not have basic charges.

Msunduzi appears to be the only KZN municipality that levies an MCB and a basic charge.

Smith added that the letter to Msunduzi laying out the tariff increases approved by Nersa for Msunduzi, also says nothing about the MCB charge. Only the usage and basic charges are listed.

She said that given just these two charges, it makes sense that Nersa would ask for the increases. Adding up just these two charges shows that Msunduzi’s tariffs compare favourably with eThekwini’s.

However, the crunch comes when the third charge is added and this is what residents have on their bills — the usage charge plus the basic charge plus the MCB/AMP charge.

According to Smith, this sees Msunduzi residents paying the highest electricity costs in the province.

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

• When all electricity costs as per Nersa’s data (basic R661,35 plus usage plus 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 the 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 is R1 367,72.

See the table provided by Pacsa for comparison on commercial tariffs.

Nersa was informed that the massive tariff hikes had the city up in arms.

The Pietermaritzburg Chamber of Business (PCB) has also said that the hikes made no sense and it has also written to Nersa seeking an explanation. The energy regulator’s spokesperson Charles Hlebela said they were dealing with the issue as a matter of urgency.

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