NERSA GIVES GO-AHEAD FOR INCREASED TARIFFS PENDING ITS APPEAL
The National Energy Regulator of South Africa (Nersa) has resolved to appeal a court order in relation to tariff hikes for the 2024/25 financial year.
The energy regulator announced the decision on Tuesday after it held a meeting on Monday to consider the Gauteng High Court, Pretoria recent ruling in favour of AfriForum and preventing increases in some municipalities.
The court found that the decision to consider municipalities’ applications for electricity tariff increases without the required cost studies was unlawful.
AfriForum’s local government affairs manager, Morné Mostert, accused Nersa of having neglected its own legislative obligations in the process of trying to assist municipalities.
“This is a great victory for civil rights. Nersa failed to protect consumers against unlawful applications for electricity tariff increases, something the law compels the regulator to do,” said Mostert.
Nersa spokesperson Charles Hlebela said the court order has an impact on distributors that have submitted their tariff applications to Nersa without cost of supply studies.
The court order follows AfriForum’s urgent application regarding Nersa’s processing of licensed electricity distributors’ tariffs applications (municipal and private distributors) for the 2024/25 financial year.
The ruling comes after Nersa had completed the consideration and approval of 178 distributors’ tariffs applications for implementation on July 1.
“With the leave to appeal having been filed, the Superior Courts Act, 2013 provides that an application for leave to appeal suspends the operation and execution of a decision, pending the outcome of the application,” he said.
According to Hlebela, Nersa’s decision still stands and distributors can proceed to implement the approved tariffs while the appeal is being processed.
New electricity tariff hikes for 66 municipalities came into effect on Monday.
The George Municipality said following a Council resolution where there was an approval for budget, electricity tariffs were increased by 12.72% effective Monday.
“We have noted the Gauteng High Court interdict against several municipalities that failed to conduct the necessary cost studies before increasing electricity tariffs. George Municipality is correctly listed as having conducted the required cost studies, and Nersa has issued the necessary approval this past week,” it said.
City of Cape Town finance Mayco member Siseko Mbandezi said they were able to reduce Eskom’s 12.74% increase to 11.78% in order to offer “protection” for lower-income customers on the subsidised Lifeline tariff.
The City said the actual tariff increase that can be expected by City customers will be 7.2% as the municipality had been charging a higher base than Nersa approved.
“The City spends more than 70% of its electricity tariff income to buy electricity from Eskom, with the City’s 2024/25 tariff based on a cost of supply submission to Nersa.
“As always, this time of the year, we advise our customers to be mindful of the context. In winter we use more electricity and this combined with the annual increase increases household costs.
To shield households, Lifeline customers will pay 44% less (R1.89 less per unit) when using over 600 units. Last year, Cape Town raised the number of units that can be bought at a cheaper, subsidised rate, from 350 to 600 units per month,” said Mbandezi.
Energy analyst Ruse Moleshe said tariff increase will always have an impact on the economy and consumers as it hits their pockets.
“In the past we had relatively lower prices but (this was) not a true reflection of what it takes to generate electricity. Certain elements were not taken into account, it was more of a political decision and now that we are transitioning into a more liberalised market or reformed market and this means hikes. Unfortunately, households are feeling the pinch and want solutions,” said Moleshe.
Cape Times
2024-07-03T06:10:44Z dg43tfdfdgfd
