Msunduzi claims its 10%

2013-11-07 00:00

THE massive hike in basic electrical charges means the Msunduzi Municipality has secured the 10% electricity tariff increase it wanted in the first place. That is if you factor in the MCB charges as well, says the Pietermaritzburg Agency for Community Social Action (Pacsa).

Its calculations show that the new basic charge passed by the Msunduzi council on Tuesday, together with the MCB charge, amounts to the same increase the council was hoping for when it asked the National Energy Regulator of South Africa (Nersa) to allow it to introduce a 10% tariff hike. [See table]

Nersa had turned down this request, pegging the hike at seven percent, but suggested that Msunduzi increase the basic charge to balance its books.

Pacsa’s Julie Smith said the MCB charge was not mentioned in this conversation, and Nersa may have believed that the hike was still below its seven percent benchmark. However, she said, the new basic charge, the MCB charge and the usage charges added together constitute a 10% increase.

“The municipality has recovered the loss of two cents on domestic consumers per kilowatt consumption by increasing the value of the basic charge. Hence it will still get the monies it planned for,” Smith said yesterday.

She added it was ironic that a supposedly pro-poor municipality had introduced basic charge increases that are highest for small enterprises and the working classes.

Meanwhile, businesses in the city were reeling yesterday over the massive basic charges forced on them with no consultation.

Restaurateur Mike Brokensha said this could spell the end of many businesses in Pietermaritzburg, which are already struggling in a difficult economic environment.

“What is really wrong is that there is no disclosure of how this money is going to be used,” he said.

Daryn Merrington, who once ran his own business but now works for a company, said it flies in the face of entrepreneurship, and young people would find it impossible to enter the world of business.

“A hike like this is going to destroy young and up-coming entrepreneurs trying to get a foothold in business world,” he said.

Midlands Bed and Breakfast Association chairperson Des Morgan said their members paid for electricity at a rate between that paid by domestic and commercial users, and they would have to investigate how the increases would affect them.

He said many B&Bs had previously indicated that a 10% hike would mean their closure, with the resultant loss of jobs and a shortage of accommodation for international events such as cycling races hosted in the city and the Comrades Marathon.

Questions were sent late yesterday afternoon to both the municipality and the National Energy Regulator of SA, but they were unable to respond by the time of going to press.

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