NERSA approves 12.20% guideline increase on your electricity bill

FEBRUARY 26, 2015

Nelson Mandela Bay residents can expect to pay at least 12.20% more for their electricity in 2015/16 after the announcement by the National Energy Regulator of South Africa (NERSA) of the municipal electricity tariff guideline increase of 12.20% for the 2015/16 financial year in the Government Gazette.

The municipal tariff guideline increase and benchmarks will apply from 1 July 2015.

The increase, however, does not include a possible second “claw back” request by Eskom to recover the additional costs associated with diesel required for running the two open cycle gas turbines for longer than was initially anticipated. NERSA has yet to indicate when it will consider any request from Eskom for a further claw back.

NERSA said that it has based the 12.20% guideline increase on a number of assumptions, including an increase of 14.24% in bulk purchases; a CPI of 6.3% and salary and wage increases of CPI plus 1%.

Also factored in is an assumption in calculating the tariff guideline were repairs and maintenance, capital charges and other costs which were increased by CPI.

NERSA said in a statement that municipalities applying for a tariff increase above the guideline will have to justify such increases to the Regulator.

Municipalities applying for a higher tariff increase will be required to provide NERSA with “a full analysis of additional funds requested as part of the motivation for a higher increase.

The Regulator also requires a list of items, such as repairs and maintenance to which the additional funds will be allocated.