City of Tshwane’s power tariff conundrum
This transpired yesterday at a city hotel where Nersa hosted public hearings regarding the City’s proposed application of 13.07% electricity increase and its new tariff structure for the 2019/20 financial year.
The City recently came under fire for effecting the new tariff without the approval of the regulator. On Tuesday it was taken to court by lobby group AfriForum, but both parties decided to enter into talks to resolve the impasse.
Acting city manager Lynette Tredoux said plans to refund customers would only apply to residents using prepaid electricity. This was because the billing for those using conventional meters had been put on hold until Monday to allow Nersa to intervene in the disputed tariffs implemented on July 1.
Tredoux said: “If there are any changes the customers will receive credits.”
The hearing started off with the City’s electricity divisional head Tom Mutshidza, who came out guns blazing against Nersa, blaming it for the City’s predicament. “We are in the quagmire today because somebody didn’t do what the law provides for,” he said.
However, he was interrupted by Nersa’s executive manager Nomfundo Maseti, who pleaded with him to refrain from taking aim at the regulator.
Mutshidza then recounted the City’s electricity increase process, which effectively started with the public participation and followed by council processes.
He was grilled by a panel of two Nersa officials about the City’s tariff restructuring, which it appeared was not done in line with the law.
Maseti said the City failed to provide the regulator with a study in the case of drastic changes proposed in its application for tariff restructuring in line with the electricity pricing policy.
Mutshidza said the restructuring of electricity pricing would affect residential customers, who would be levied a monthly fixed tariff at R56 and agriculture, to be levied at R250. The initial proposal to council was R120 for residential consumers and R610 for agriculture, but that was amended.
Speaking to journalists, Maseti said the blame on the regulator stemmed from the “timeline prescribed in the Municipal Financial Management Act, that on March 15 Nersa should have been in a position to issue guidelines for the tariff”. But she said the regulator had already complied with the Act before March 15. “What they included in their application does not have the information that is called for in the electricity pricing policy; the policy is very clear that if you are going to make significant changes in your tariff structures you should do course study.”
She said the City should have shed light on its cost of power supply “so that we can have an appreciation of the cost the municipality has incurred”.
Regarding the study, she said: “They had a draft in 2014 and it was merely a draft. They don’t have what the policy requires.”
The City promised to furnish Nersa with additional information to meet the requirements of the electricity pricing policy within seven days. Maseti couldn’t tell when Nersa would announce its ruling on the matter.
Utility Services MMC Abel Tau stuck to his guns that council was the executive authority on the matter.
He told the Pretoria News that Nersa should have given the City its guidelines at least three months before the end of financial year. He said the guidelines would have helped the City to address on time issues that cropped up.
Regarding the City’s non-compliance with electricity policy, he said: “You would understand that the same study they are asking for was done back in 2014 this is a problem now because we are pressed for time.”