Pretoria – The National Energy Regulator of South Africa (Nersa) has approved the City of Tshwane’s proposal to increase electricity tariffs by 13.07% for the 2019/2020 financial year.
Nersa spokesperson Charles Hlebela said the regulator raised concerns about electricity losses and a lack of proper consultation prior to tariff increases.
“The City must also provide Nersa with an energy losses reduction plan to ensure their energy losses are reduced,” he said.
The City was also ordered to use a minimum 6% of its electricity revenue towards repairs and maintenance to reduce the impact of energy loses, according to Hlebela.
He said that in future the City needed to conduct proper consultation.
The approval process took time after Nersa questioned the legality of the City’s tariff restructuring.
In terms of the City’s restructuring of electricity pricing residential customers would have been levied a monthly fixed tariff at R56, while those paying for agriculture at R250. The proposal to council was R120 for residential consumers and R610 for agriculture, but that was amended.
On July 11 the energy regulator convened a public hearing during which the City offered to reimburse customers who have already purchased electricity at higher rates since July 1, but it remained to be seen how it would approach the repayment process.
During the hearing Nersa’s chief executive Nomfundo Masiti also raised issues regarding the absence of a study to back up the City’s case of restructuring of pricing.
“What they included in their application does not have the information that is called for in the electricity pricing policy; the policy is very clear that if you are going to make significant changes in your tariff structures you should do cost study,” she said at the time.
She said the City had “draft” compiled in 2014 and didn’t have what the policy required.
Hlebela said: “The energy regulator ordered the City to undertake the cost of supply study when restructuring their tariffs.”
Both the City and AfriForum had been at loggerheads with each other in the wake of the City’s announcement to forge ahead with the electricity hikes despite the approval by Nersa.
AfriForum approached the court in a bid to reverse the City’s decision to increase electricity.
In court, both parties proposed to engage in talks with each other and suspend the legal route to solve their impasse.
They agreed to reverse tariff increases effected on July 1 until Nersa’s final determination on the matter.
Article by RAPULA MOATSHE and IOL