Consumers who get electricity from municipalities ‘could pay more’

2013-03-09 09:05

An electricity tariff hike of 8% would not be good for residents who get their electricity from municipalities, the SA Local Government Association (Salga) has said.

“Nersa’s (National Energy Regulator of SA) announcement on the 28th of February 2013 appears to have misled many into believing that tariff increases for all electricity consumers have been set at an average of 8%,” Salga’s marketing manager, Buhle Ngwenya, said in a statement.

Ngwenya said that when Nersa made an announcement on the electricity tariff hikes it did not explain how consumers who got electricity from municipalities would be affected.

“The actual announcement did not give a full picture ... It only focused on people getting electricity directly from Eskom.”

The 8% increase did not give details on how bulk buyers of electricity like industries, business and municipalities would be charged.

Nersa had confirmed that a price increase determination that would affect the majority of South Africans would be made on March 13.

Salga wants municipalities to be charged less than 8% as the suppliers of electricity to residents.

“In order for residential consumers supplied electricity by municipalities and those supplied by Eskom directly to be treated the same, Nersa must determine that Eskom will not impose an increase to municipalities higher than 8%.”

If the 8% tariff hike applies to municipalities, residents getting their electricity from municipalities will pay more than those getting it directly from Eskom.

“In addition to covering Eskom’s bulk costs, municipal prices to consumers must also make provision for the cost of providing the distribution service which includes infrastructure repairs and maintenance costs, labour costs, finance ...,” said Ngwenya.

She said those costs were normally passed on to consumers.

Nersa granted an 8% electricity tariff hike.

Initially Eskom had applied for a 16% increase every year for the next five years.

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