Prepare your wallet for another mugging. South Africa’s national energy regulator, NERSA, is proposing a 7.47% increase in municipal electricity tariffs. The price hike would come just three months after Eskom’s recent tariff increase. The state-owned power utility scored an extra 9.6% in tariffs — less than the roughly 20% it was seeking, but still enough to sting.
NERSA, via a new discussion document, is proposing the new 7.5% tariff increase kick in from 1 July 2022. That’s the process as usual, but the agency says that it will not hold public hearings on the matter. It cites time pressure as the reason for this, meaning that all comments will have to be submitted online. The current increase will use a historic method to determine how much municipalities will charge based on existing tariffs.
NERSA, I said good day, sir!
This is a deviation from the norm and is very likely to face legal opposition. Two ongoing legal challenges are already opposing this method of setting tariffs. One was brought by electricity users in Mabideng in North West. The other comes via the Nelson Mandela Bay Business Chamber and the Pietermaritzburg and Midlands Chamber of Business.
Instead of public participation, NERSA wants stakeholders (that’s you) to submit a written comment. This must be done by 22 April. The agency intends to finalise its guidelines and benchmarks by 11 May 2022. Even if it does, NERSA will face considerable opposition.
The DA’s shadow minister of mineral resources and energy, Kevin Mileham, said, “By foregoing a public participation process on the municipal tariff increase, NERSA is denying residents and municipalities an opportunity for a procedurally fair process to air their views on this increase. Consumers are already struggling to keep the lights on at current electricity prices cost levels, yet NERSA thinks it is not important to canvass their views on another tariff increase.”
“Due to the limited ability of municipalities to absorb costs and cushion consumers against electricity tariff increases, the costs will be passed on to the consumer. It is simply unacceptable for tariffs hikes to be imposed on consumers without any public hearings. A cloak-and-dagger operation, carried out without the input of those who would be most affected, is simply not right.”