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Costs may drive households to solar - MP

2012-02-21 18:19

Cape Town - Households will switch over to solar electricity in the next five to ten years if municipal surcharges were not checked, an MP said on Thursday

Independent Democrats MP Lance Greyling was speaking during a briefing to Parliament's energy committee by members of the electricity distribution industry.

He said municipalities had been given a monopoly to charge what they liked for electricity.

"There is no regulation over the surcharge," he said.

"Eskom's monopoly in terms of generation is regulated by the regulator. Municipalities have a monopoly within their borders over distribution.

"But if municipalities continue to put prices up, this is going to be an overall threat to that source of income."

Greyling said there was a "massive disincentive" on a municipal level for promoting energy efficiency measures.

"Clearly if your revenue base depends on the sale of electricity, you are not going to be implementing in a very aggressive fashion, energy efficiency strategies," he said.

The price of solar panels was reducing quickly so it would be cheaper for households to install them instead of buying electricity from municipalities.

The SA Local Government Association (Salga) has said that 30% to 40% of local government revenue comes from electricity sales.

Greyling said prices could be increased on other services.

"Are we pricing water, sewerage properly? Are we pricing all other services local government provides properly?

"... Our method of funding local government through electricity sales is not sustainable into the future."

Salga's infrastructure services executive director Mthobeli Kolisa told the committee that there was "general acceptance" in the government that the pricing structure had to be reviewed.

He said however, that "under the current fiscal arrangements" the viability of local government had to be considered before any changes were made.

"Unlike electricity if a consumer stops paying for water, refuse removal or sanitation, this has an impact that would have to be absorbed by the government," Kolisa said.

"If you increase prices of the other services it means nothing. Because even if they don't pay you still have to provide those services."

The other alternative, he said, was to increase rates on houses.

Comments
  • Ben - 2012-02-21 18:43

    A lot of sense. Another alternative for the municipalities might be to cut on staff expenditure.

  • Lawrence - 2012-02-21 18:45

    I will have to use solar in Randfontein,this land master of mine is more than crazy

  • John - 2012-02-21 18:54

    Well done you *rat, now you've given the robber barons an excuse to raise rates, and we know that there is only one group of people that pay them, and that's them with the money. Black and white.

  • goyougoodthing - 2012-02-21 19:21

    Hold on, what do rates cover? Basic services such as garbage collection, verge clearing. The suposed fuel levy pays for roads - oh no wait they want to toll roads for that. Electricity covers, electricity I imagine. But wait, the municipalities make a huge amount from electricity, already, in fact because they sell it for more than they purchase it, how could they not? Unless there is waste - never? So we must raise electricity to pay for other services? How does that work exactly? Something is very very wrong here. To put in solar power seemed expensive a few years ago but now that my average monthly bill is R2500 it amounts to about 5 month's worth of electricity. Then what, higher rates to pay for infrastructure which we are not using... so sick of it.

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