Anger against the National Energy Regulator of South Africa’s (Nersa) approval of the Sol Plaatje Municipality’s latest electricity tariff hike is building amongst community groups and business chambers because “questions went unanswered” after a marathon meeting last week in the Council Chamber in Kimberley.
The CEO of the Northern Cape Chamber of Commerce and Industry (Nocci), Sharon Steyn, says they are certainly not satisfied with the commercial tariff hikes and “lack of proper public participation” before the hikes were introduced on 1 July.
“We are not fighting with the municipality; we want to work together. That is why we want to see the municipality’s Cost of Supply (CoS) study (done in 2022) that was submitted in their application to Nersa to increase the tariffs. We cannot understand how the study can be valid for five years. How can you predict what the cost of living or economic conditions will be in the next five years?”
Steyn says the municipality cancelled three public participation meetings to discuss the tariff increases and the next financial budget in May and June.
“The third one was eventually held on our insistence, and only ten people, besides officials, attended. There was not enough time to work through the information and raise objections before the new budget was imposed. We insist on receiving the attendance register of the public participation meetings, the Nersa approval documents and the cost of supply study itself from the municipality for us to scrutinise. To date, none was received.”
Steyn says the municipality is in financial dire straits.
Illegal connections to be addressed
Tumelo Mosikare of the Sol Plaatje Community Forum says they asked the Nersa representative several questions at the meeting.
“How can Nersa or the National Treasury approve the residential tariff hike in the budget, but ignore that 30% of the bulk electricity bought by the municipality is lost through illegal connections or network problems? We want Nersa to investigate this issue rather than approving tariff increases to make up for these losses. In our view Nersa must force the municipality to reduce the losses. It does not seem that the municipality has a proper plan to successfully solve the problem.
“The regulator must not side with the municipality but protect consumers. We are very concerned about the reaction from residents once the municipality introduces its basic and capacity charge that can be anything from R200 a month and upwards.”
Mosikare claims no official Tariffs Reference Group was formed at the meeting.
Explanation needed
Boyce Makodi of the Kimberley Action Group said the municipality’s poor communication with residents irks them.
“There was a lack of prior consultation. We have a problem with the increase in the basic and capacity charge and the partial blocking of electricity meters. Officials need to explain these increases to the residents, considering the recent court order against Nersa in which Sol Plaatje was not listed as a municipality that complied with Nersa’s regulations to increase tariffs.
“Officials at the meeting last week could not explain how they are going to impose the proposed 24% on the basic and capacity charge in the next weeks. It seems that residents using more than 20 amps will not pay the charge, but residents all have 60 amps electricity boards.
Continued engagements planned
According to Thabo Mothibi, municipal spokesperson, the meeting went well, and agreements were made.
“We met a wide range of stakeholders that includes the Kimberley Action Group, Nocci, Kimberley Large Business Forum, and others. Nersa and the National Treasury joined virtually. Discussions centered around the current increment and future tariffs on electricity and others. We also made presentations on the state of municipal finances.
“We have established a Tariffs Reference Group aimed at proactively engaging structures on misperceptions on the electricity tariff increase, illegality, and a lack of consultation.
“This group will have continued engagements during the financial year. All matters concerning tariffs will be ventilated upon and where necessary other stakeholders such as specialists, Nersa and National Treasury shall be invited. The budget and integrated development plan (IDP) public participation processes have now received an extension through the Tariff Reference Group.”
“All matters pertaining to tariffs should be openly dealt with no veil of secrecy. The CoS study was completed in March 2022 and approved by Council for public consultation and Nersa approval. The first wave of public consultation on CoS started in April 2022. Nersa could not complete its assessment on the study that year citing it needed at least six months. Hence, in the 2023-’24 proposed budget the CoS formed part of public consultation for the second time and was approved by Nersa for implementation for the first time.
“We conducted public consultations again for the current approved budget 2024-’25. The consultations were through the proposed 2024-’25 budget and IDP public participation engagements to wards and one meeting that was business based.
“The cost reflective basic charge and capacity charge is approved by Nersa at 24,2% against the initial cost revenue recovery requirement as guided by the CoS. It will be spread and phased in over the next five years in an all-out effort to protect customers against excessive increases.”
Mothibi says about 12 000 indigent customers and 30 000 residential households with capacity limited to 20 amps will not be affected by capacity charges or basic charges.
“The municipality will issue notices to affected households and allow them to opt for selection or for voluntary reduction.”
