Business Chamber at forefront of electricity debate

2015-08-12 06:00

THE current electricity tariff system is in particular jeopardising the sustainability of energy-intensive industries.

This was said by the Nelson Mandela Bay Business Chamber (NMBBC) during their presentation to NERSA at their public hearing in Johannesburg on August 6.

NMBBC representatives David Mertens, said winter months energy costs are a substantial problem for industry and specifically the peak tariffs.

“These tariff structures are destructive for heavy industry running continuous operations and simply unaffordable,” Mertens said.

Mertens was the first to do a presentation following a presentation by Eskom at the public hearing. He was one of only three other presenters from the business community to address NERSA on the topic.

The purpose of the hearing was to get public input on the proposed Cost of Supply (COS) Framework to be used by licensed electricity distributors in South Africa.

The Framework will be a guide to licensees when developing their COS studies, which will ultimately determine the price of electricity paid by businesses and citizens in Nelson Mandela Bay, and the rest of the country.

NMBBC said they have played an active role in protecting businesses’ interest in relation to electricity tariffs. This was the second time that the Chamber presents at a NERSA public hearing in less than two months, following the presentation at the public hearings on Eskom’s selective reopener application – which was subsequently rejected.

NMBBC said while they support the proposed COS Framework, several improvements were proposed by Mertens, including:

) Distributors of electricity not supplying audited financial statements should not qualify for annual tariff increases;

) Ring-fenced and audited electricity accounts are specifically required;

) The Framework must explicitly ensure monies are not disappearing to non-related expenses;

) Reasonable returns must be limited to returns on capital funded by the licensee;

) Cost reduction plans must be an essential function of electricity distributors; and

) A solution for industry winter tariffs should be found.

“By implication the winter energy costs also impact heavily on the retail sector and many SMMEs,” said Mertens.

He also requested NERSA to evaluate this situation and find solutions to properly allocate peak charges to customer categories responsible for peak usage

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