Nelson Mandela Bay Business Chamber joins court challenge over April electricity hikes

MARCH 30, 2016

The Nelson Mandela Bay Business Chamber has joined the case of the High Energy User Group (HEUG) - consisting of several energy intensive industrial companies based in Nelson Mandela Bay- as a co-applicant, in the launching of an interdict to stop Friday’s electricity hike, approved by the National Energy Regulator (Nersa).

"The Nelson Mandela Bay Business Chamber, representing the interest of our 700 membership base, has joined the HEUG with their legal case to apply for an interdict to stop, and subsequently review, the proposed tariff increases, as approved by Nersa earlier this year," said Cindy Preller, Communications Manager at the Chamber.

"Given the imminent implementation of the increase (Friday, 1 April 2016), the interdict was lodged in the Pretoria High Court last week, and served upon Eskom and Nersa accordingly. The application for the temporary interdict, pending the review of the electricity tariff increase, will be heard on Thursday."

She said that the Nelson Mandela Bay Business Chamber on 20 January 2016 presented at a Public Hearing in Port Elizabeth on whether Nersa should approve Eskom's Regulatory Clearing Account (RCA) application of R22.8-billion for the multi-year price determination (MYPD).

"The Nelson Mandela Bay Business Chamber rejected all increases beyond the original multi-year price determination (MYPD) schedule because an increase would negatively impact on the sustainability of business in the city. We further argued that the application was unprocedural in various respects," described Preller.

"Subsequent to the Public Hearings, which took place across the country, Nersa announced its decision on 1 March 2016 to allow Eskom a tariff increase of 9.4% (year-on-year), as opposed to the 3.5% that Eskom would have been entitled to had the RCA application not been lodged.

"This decision, if implemented, will cost each user an additional 6% on their current tariff bill. Monthly, it will cost each company an estimated additional R60 for each R1000 spent on their average electricity bill for the 2015/2016 tariff year."