8% hike not for all power consumers

Independent Newspapers

File photo: Dumisani Sibeko

An electricity tariff hike of eight percent would not be good for residents getting their electricity from municipalities, the SA Local Government Association (Salga) said on Friday.

“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 eight percent,” 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 eight percent 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 a majority of South Africans would be made on March 13.

Salga wants municipalities to be charged less than eight percent 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 eight percent.”

If the eight percent 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 to consumers.

Nersa granted eight percent electricity tariff hike.

Initially Eskom had applied for a 16 percent increase in electricity prices in each of the next five years. -Sapa