Nelson Mandela Bay Business Chamber to oppose another Eskom tariff increase

JANUARY 18, 2016

Representatives from the Nelson Mandela Bay Business Chamber are expected on Wednesday to present local business concerns regarding additional electricity increases at a National Energy Regulator (NERSApublic hearing in Struandale, Port Elizabeth.

Nersa began public hearings on Monday in Cape Town as part of Eskom’s Regulatory Clearing Account (RCA) application for the third year multi-year price determination (MYPD3) to recover an additional R22.8 billion through an electricity tariff increase.

In June last year, Eskom's application for an additional 9.58% price hike was rejected by Nersa following a resounding no vote from the public and business. The increase, had it gone through, would have brought the total increase in 2015 to over 22% after prices also rose in April 2015.

Eskom is facing a funding gap to 2018 of up to R200 billion.

"As a leading business chamber in the country, the Nelson Mandela Bay Business Chamber strongly rejects additional increases in electricity tariffs for 2016," the Nelson Mandela Bay Business Chamber said in a statement.

"Lobbying on behalf of our members on issues that affect their sustainability, we simply cannot accept the raising of tariffs by nearly 17% by April this year, instead of the 8% already agreed upon."

The Chamber said that citizens and businesses in Nelson Mandela Bay cannot afford increases beyond the original MYPD3 and, once granted, this application would not be in the interest of an enabling environment for business to be globally competitive – particularly in the current economic climate we find ourselves.

"Business simply cannot absorb the effects of this RCA application, which we believe is to recover inefficiencies in maintenance and planning by Eskom.

"Against the background of a crippling drought, national political instability and the depreciation of the Rand, we propose that tariffs must, in fact, be contained and minimised to accommodate businesses, who find themselves under immense strain, to counter the economic downturn by stimulating growth and employment in the country," reads the statement.

"Electricity tariffs have increased almost five fold since 2001 and as a result business has had to reduce its usage of power and invest in alternative energy as prices continue to escalate. This could inevitably lead to further reduction of investment and employment in the country.

"The Nelson Mandela Bay Business Chamber will continue to be at the forefront of protecting businesses’ interest in relation to uncompetitive electricity tariffs, as we did last year by lobbying in various public meetings and behind the scenes for the future sustainability of the city’s economy."