New electricity tariffs – Solidarity steps in

Your bill could increase by 80% – its not just a Pretoria/Gauteng issue in the long run.

Civil rights group AfriForum is consulting its lawyers after its efforts to stop the City of Tshwane from implementing controversial new electricity tariffs failed, which does not bode well for users country-wide, despite the court order to replace the city’s smart meters.

The National energy regulator (Nersa) refused to approve the City’s tariffs  after learning from AfriForum about concerns that especially smaller residential users could face increases to their bills of more than 80%. Proposed changes by Tshwane could mean that before users use a single unit, they could be responsible for R200 fees.

Nersa’s regulator member Nomfundo Maseti said  that  structural changes the City proposed to its tariffs are so drastic that Nersa should hold public hearings to assess the impact on consumers before considering them.

The City nevertheless proceeded to implement the tariffs on Monday without Nersa approval, in contravention of the Electricity Regulation Act (Era).

The new tariffs also put the business model of electricity resellers in Tshwane in serious jeopardy by the inclusion of a new fixed monthly charge of more than R2 600 and a demand charge for bulk residential service points. According to the Electricity Resellers’ Association of South Africa (Erasa) the new tariffs represent a rise of up to 400% in cost for resellers who do the internal electricity distribution in residential complexes.

In addition, the City has introduced the fixed charge of R200 per month for residential customers who buy their electricity from resellers.

This means these households have to pay R200 before using a single unit of electricity.

Moneyweb, in its follow-up article, said “resellers will be selling electricity at a loss. This is putting the electricity supply of about 150 000 households at risk.”

The Tshwane Money Matter Caucus under the leadership of former DA councillor Lex Middelburg has also pointed out that the proposed new Tshwane tariffs will result in sharp increases in electricity costs for residents on small holdings and farm land.

What happens now?

How this situation can be resolved is not clear, since the Municipal Finance Management Act only allows municipalities to change tariffs at the beginning of their financial year on July 1, unless the minister of finance gives them special exemption.

NewsHorn is aware of electricity users in rural farming areas (Mpumalanga) who used to pay R200 per month, now having to fork out R700.