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Business Chamber welcomes Nersa decision on proposed Eskom tariff hike

Dec 16, 2017
Business Chamber welcomes Nersa decision on proposed Eskom tariff hike

The Nelson Mandela Bay Business Chamber welcomed the decision by the National Energy Regulator of South Africa (NERSA) to keep the electricity tariffs in South Africa at an affordable rate.

NERSA announced its decision on Eskom’s revenue application for the 2018/19 financial year on Friday.

The Nelson Mandela Bay Business Chamber was one of many stakeholders to give input during public hearings hosted across South Africa in November, and also made written submissions to Nersa on behalf of organised business in Nelson Mandela Bay.

“We have a strong mandate to lobby and advocate on behalf of our members, and have done so on this very pertinent issue of electricity tariff increases for many years. Whether in court, in public hearings or in closed meetings, we will continue to champion the rights of local businesses to have access to quality electricity that are priced cost-effectively to ensure the sustainability of businesses in the Metro,” said Nelson Mandela Bay Business Chamber CEO Nomkhita Mona.

Eskom’s application to increase electricity tariffs to a general increase of 19.9% and an increase to the municipality of 27.5% had been widely condemned during last month’s public hearings. We thank all our Nelson Mandela Bay partners who supported us in the campaign against unsustainable electricity increases.

“In particular, we thank the Nelson Mandela Bay Municipality, who took the unprecedented step of presenting at the Nersa public hearing in Nelson Mandela Bay. We also thank our other partners Agri Eastern Cape and the Energy Intensive Users Group. Our voices have been heard as a united front,” Mona said.

 These Nelson Mandela Bay stakeholders all lobbied for a tariff increase that is contained to levels of inflation, or below.

“As the Business Chamber we are relieved by Nersa’s decision to only grant Eskom a 5.23% average price increase – given the difficult economic climate in the country. The public cannot be penalised for Eskom’s inefficiencies as a result of maladministration and governance failures.”

“We call on government to address Eskom’s non-performance as a matter of urgency, in order to create an enabling environment for businesses to thrive in,” Mona said.

Nersa grants Eskom 5.23% tariff increase

Nersa granted power parastatal Eskom an average percentage price increase of 5.23% for the 2018/19 financial year.

Eskom had applied for a 19.9% average increase in electricity tariffs for 2018/19, which would have resulted in total allowable revenue of R219.5 billion. Instead, the 5.23% tariff increase granted by Nersa will give Eskom allowable revenue of R190.348 billion.

Nersa said it had followed due regulatory processes in considering Eskom’s revenue application for 2018/19.

“On 13 September 2017, Eskom’s application was published on Nersa’s website, along with an invitation to stakeholders to submit written comments.

“A total of 23 000 written comments were received from stakeholders, consisting of comments from private individuals, small users, intensive energy users, non-governmental organisations and environmental activists, as well as local government and other stakeholders.

“The energy regulator conducted public hearings in eight provinces of South Africa from 30 October to 22 November 2017. The public hearings afforded interested and affected stakeholders the opportunity to submit their views, facts and evidence. A total of 96 oral presentations were made.

“The energy regulator appreciates and encourages stakeholder participation in its decision-making processes and would like to thank all stakeholders for their valuable comments and input,” said Nersa in a statement on Friday.

The regulator said the decision and the reasons for it will be published on its website -- www.nersa.org.za -- in due course.

Nersa said it has further decided that the allowed revenues must be recovered from Eskom’s standard and non-standard tariff customers based on previously approved tariff principles and structures, using the Eskom Retail Tariff Structural Adjustment methodology that is approved by Nersa.