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Organised Business calls for halt to electricity hike application

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The Nelson Mandela Bay Business Chamber yesterday proposed a deferral of Eskom’s application to increase the electricity tariffs countrywide by 19.9%.

Representatives from the Nelson Mandela Bay Business Chamber made this recommendation at the National Energy Regulator of South Africa (Nersa)’s Public Hearing on Eskom’s 2018/19 Revenue Application, which was held in Port Elizabeth yesterday (1 November 2017). The application requires a general increase for Eskom customers of 19.9% and an increase to the municipality of 27.5%.

Nelson Mandela Bay Business Chamber Board lead: Electricity and Energy MC Botha said given the significant gaps in the information made available in the public domain in reviewing the application, as well as the recent comments made by Finance Minister Malusi Gigaba, the Business Chamber proposes that the public participation process be suspended, that all relevant information be provided and that the consultative process proceed thereafter.

Botha recommended Nersa and Eskom to consult with Gigaba, who reportedly said the electricity hike was “unjustified” and would serve as a “perverse incentive”. He was quoted at an event organised by the Durban Chamber of Commerce and Industry earlier this week.

If the process to review the application were to continue despite the Business Chamber’s view that this would be irregular, the Business Chamber proposes that Nersa approves a tariff that is contained to levels of inflation, or below.

“The public is simply being asked to pay for Eskom’s inefficiencies and governance failures. The total value of governance failures, maladministration and irregularities flagged by the Auditor General, or forming part of investigations and reports, approximates some R20- billion. We request Nersa to take these inefficiencies into consideration when reviewing the tariff structure,” Botha said.

Nelson Mandela Bay Business Chamber Task Team member David Mertens, who co- presented with Botha, said the application is not serving the country. “We have more overcapacity of electricity, than any other African country’s capacity at the moment,” Mertens said.

Mertens said the total average increase the proposed new electricity tariffs would cost the people of Nelson Mandela Bay in 2018 is R850-million. This includes a R265-million increase to households; R160-million increase to small businesses; and R425-million increase to industry.

Nelson Mandela Bay Executive Mayor Athol Trollip, who presented on behalf of the Municipality, said the Metro “simply cannot sustain these increases”.

He said the proposed tariff increases would jeopardize the municipality’s ability to achieve its mandate of providing safe and cost effective electricity supply, as well as promoting economic development and job creation in Nelson Mandela Bay.

City Manager Johann Mettler proposed an 8.3% increase for 2018/ 19 and said the municipality would continue to lobby with the Nelson Mandela Bay Business Chamber on behalf of the region to create an enabling environment.

Agri Eastern Cape Vice Chairman Wayman Kritzinger, said the proposed electricity increase could have a severe impact on food security and sustainability. “It is likely to put farmers under enormous cash flow pressure,” Kritzinger said. Agri Eastern Cape suggested a single digit increase.

Energy Intensive Users Group CEO Xolani Mbanga, who was the last presenter of the day, also recommended an increase in line with inflation. EIUG represents 40% of SA’s electricity usage.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.