Owners reel at tariff hikes

2013-12-24 00:00

MSUNDUZI Municipality has dealt a bitter blow to the festive spirit of small business owners whose latest electricity bills reflect 900% to 1 200% increases in their basic charges.

The Witness has been inundated with calls from owners reeling at the amounts reflected on their accounts.

One businessman was paying an average of R1 200 before the increase — his latest bill is for an amount of R3 268.

Another was paying R697, but now it is R2 800. In yet another case a business’s fixed-basic and mini circuit breaker-charges (MCB) comes to over R1 000 — even though their actual electricity consumption is only R200.

Business owners interviewed by The Witness predict a bleak new year for the city which they say will see more retrenchments and businesses closing down as a result of the power hikes.

However, they are even more devastated that the increase has come now as they believed the hikes were still under discussion with the National Energy Regulator of South African (NERSA).

In November a council meeting was told that NERSA, who denied Msunduzi a 10% tariff hike, had agreed that basic charges for commercial businesses — shops and offices — could be increased by between 900% to 1 200%.

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

Pietermaritzburg Chamber of Business CEO Melanie Veness said at the time that the increases were devastating and would result in job losses and business closures.

Veness said she was going to contact NERSA to find out what was happening.

Yesterday Veness said that she had also been inundated by calls from anxious business owners. She contacted NERSA who told her no decisions had been made and that the energy regulator was waiting for more paper work from Msunduzi.

Veness said municipal manager Mxolisi Nkosi had told her that council had received a letter of approval from NERSA giving them the green light to implement the basic charges.

She said the city needed a full explanation from both NERSA and the municipality on what was going on. “The setting of tariffs has to be a transparent and democratic process, so far this has not been the case and what has happened has been unacceptable,” said Veness.

She added that the business chamber would fight tooth-and-nail on this issue because the survival of many businesses depended on their being able to afford electricity.

The mandate of the energy regulator is to ensure that electricity in the country is affordable and had pegged municipal electricity tariff increases at seven percent.

The Pietermaritzburg Agency for Community Social Awareness (PACSA) believes that NERSA agreed to the drastic increases in basic charges because they were unaware of the existing MCB charges in the city.

PACSA’s own research has indicated that Pietermaritzburg could be paying the highest electricity costs in the province.

Msunduzi Chief Financial Officer Nelly Ngcobo was contacted to find out about the tariff hikes, but she did not respond by the time of going to press.

Raffick Amod, who rents out shops to small businesses in the CBD, said he had seen grown men cry over their future as a result of the bills. For many, the increase consumes their entire profit.

“Just last month two young entrepreneurs came to rent a shop that is only 60 square metres in size to sell fruit and vegetables. Their electricity bill came to R2 600. This is more than the profit they make. A month after opening they are forced to close,” Amod said.

He added that several small salon owners in the city have also approached him to give up their leases.

Naresh Singh employs eight staff in two shops and said he was going to have to retrench four of his workers to cover his electric bill.

DA member of the city’s executive committee, Mergan Chetty, said he was also fielding calls daily from desperate business owners.

“Our municipality has spread much doom and gloom over the festive period,” he said.

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