Nersa executive manager Nomfundo Maseti. Picture: Rapula Moatshe
Nersa executive manager Nomfundo Maseti. Picture: Rapula Moatshe

Tshwane under fire from Nersa for failing to submit electricity pricing study

By Rapula Moatshe Time of article published Jul 11, 2019

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Pretoria - The City of Tshwane on Thursday came under fire for failing to submit a study regarding its assessment of electricity pricing it implemented on July 1.

This transpired at Sierra Burghers Park Hotel in Pretoria, where the National Energy Regulator of South Africa (Nersa) hosted the public hearing regarding the City's proposed application of 13.07 percent electricity increase and its new tariff structure for 2019/20 financial year.

The panel of two Nersa representatives grilled the City's top officials about the tariff restructuring, which it appeared was not done in line with the law. 

Nersa's executive manager Nomfundo 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.

The City's divisional head for electricity Tom Mutshidza earlier blamed Nersa for not providing the municipality with guidelines for electricity pricing on time.

He said the pricing restructuring 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 "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". 

She however 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 studies," she said.

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.

The hearing started off with a municipal senior official Tom Mutshidza, who came out with guns blazing against the energy regulator, 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.

He was however interjected 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.

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 the financial year.

He said the guidelines should have helped the City to address on time issues that cropped up on the eve of tariffs implementation.

Regarding the City's non-compliance to electricity policy, he said: "You would understand that the same study they are asking for was done back in 2014. 

"We should have a foresight as the City, but this is a problem now because we are pressed for time."

Pretoria News

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