12.20% Guideline Increase for Electricity in 2015/16 Financial Year

NOVEMBER 24, 2014

The guideline increase in the electricity tariffs for the 2015/16 financial year has been put at 12.20%, the National Energy Regulator of South Africa (NERSA) has announced.

The Municipal Tariff Guideline, Bench-marks and Proposed Timelines for Municipal Tariff Approval Process for the 2015/16 financial year have been released by NERSA as a consultation paper for public comment.

NERSA states that according to its time-lines, the tariff guideline and bench-marks will be approved by January 29 next year.

It adds that this will assist municipalities in their budgetary processes “enabling them to submit their tariff applications to NERSA on time”.

NERSA said that in developing the guidelines for 2015/16 it had taken into account the fact that on September 30 this year Eskom had been granted an average increase of 12.69%.

It says that the average cost structure for municipalities in terms of weighting has been changed with bulk purchases now accounting for 73% of total cost against the current figures of 70%.

Salaries and wages continue to account for 10% of the total, repairs 6% and capital charges 4%, while “other costs” have been reduced from the current 10% to 7%.

NERSA says it accepts that each municipality has “a unique cost structure that enables it to directly supply electricity”.

It says should a municipality provide its “actual cost to supply, the difference will then be used to adjust the overall increase awarded to the municipality”.

NERSA says a number of factors will be taken into account in this regard, including bulk purchases, bad debts, reasonable energy losses, direct and indirect charges and salaries and wages.

Further, the municipality’s “overall financial and technical performance,” that will include issues such as repairs and maintenance and percentage energy losses will be reviewed. - MetroMinutes.


Photo courtesy of www.bdlive.co.za