PMB power bill hikes: who is to blame?

2014-01-09 00:00

WHERE lies the truth in why and how Pietermaritzburg’s commercial sector was hit with massive electricity tariff increases of well over 900%?

Businesses were presented with the whopping increases in December. To add insult to injury, the amounts were backdated to July. Accounts had more than trebled, costing many businesses more than the profits they make. Owners indicated that they would be forced to close down or retrench staff.

The Witness has been trying to get clarity on how the tariff hikes came about and came up with a confusing picture, with Msunduzi saying one thing and the National Energy Regulator of SA (Nersa) another. The story so far:

• Msunduzi Municipality put up its electricity tariffs by 10% for the 2013/14 financial year. It started charging residents the new tariff in July, before getting approval for the increase. Nersa had recommended maximum hikes of seven percent. Msunduzi’s application for the higher increase was turned down.

• The municipality appealed.

• Yesterday, Nersa said that the appeal was still under discussion. The energy regulator’s spokesperson Charles Hlebela said: “The municipality has submitted an application to review their basic charges, but this is still under consideration. Nersa has met with the municipality and stakeholders in trying to resolve the matter.”

• Msunduzi municipal manager Mxolisi Nkosi insists they raised the commercial tariffs at Nersa’s command. He sent a letter to The Witness from Nersa as proof.

The letter, dated June 28, 2013 was signed by Nersa CEO Phindile Nzimande. It referred to correspondence from the municipality dated June 4, 2013 and states that as per Msunduzi’s application, the approved commercial tariffs are basic charges of R661,35 per month (up from R49,22) and R881,80 per month (up from R86,14).

• This letter appears to predate Msunduzi’s appeal application. Yet councillors only came to know about it in October, when a special council sitting was held to finalise the electricity tariffs. Opposition parties asked why the letter was only being tabled for discussion three months later.

• Nersa said then, as it has now, that no decisions had been made and the tariffs were still under discussion.

• Yesterday The Witness pressed Nersa for a more detailed response, asking why the matter was still under discussion three months later. Nersa was also asked how it had denied Msunduzi a 10% increase and then allowed it a hike of over 900%. Hlebela responded that he could not comment further on the matter, but that it was receiving “urgent” attention.

• Asked why Msunduzi was charging the commercial sector the exorbitant tariffs if Nersa says the basic charges are still under consideration, Nkosi said the discussions concerned domestic basic charges and not commercial charges, which had been decided.

Lawyer Sundeep Singh has been retained by a group of businessmen to seek answers, even if it means going to court.

Singh said he could file papers under the Promotion of Administrative Justice Act by the end of the week.

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