HomeNewsSouth African municipalities happy with lower national tariff increase

South African municipalities happy with lower national tariff increase

Michael Rhode,
President, AMEU
13 April 2012 – The president of the Association of Municipal Electricity Undertakings (AMEU) in South Africa Michael Rhode, has commented on the tariff increase reductions announced by the National Electricity Regulator of South Africa (Nersa).

He said the AMEU welcomes the announcement by Nersa on the 9th of March 2012 of a 9.9% reduction in the anticipated Eskom average price increase of 25.9% to a level of 16% which came into effect from the 1st April 2012. This has translated to an average increase in the bulk electricity prices to municipalities of 13.5 % with effect from the 1st of July 2012.

“Considering the misalignment of the Eskom and municipal financial years, this translates into a net reduction of 13.56% (inclusive of the environmental levy) in the expected municipal bulk tariff price increase of 27.06%. This lower percentage increase will bring much relief to electricity users who are continually facing increased pressure on their purses, thanks to endless increases in their basic costs.”

He said however, “It is disturbing to note that that the implementation of the Inclining Block Tariffs (IBT) is still being forced upon municipalities despite our many calls for proper consultation pending implementation. It is well known that IBT is a difficult concept for our communities to understand and many municipalities have their hands full dealing with irate members of the community as well as coping with the negative financial impact on their budgets.”

The AMEU, together with SALGA and Eskom, has submitted a comprehensive position paper on the problems with IBT but Nersa had not yet completed a review of this tariff as envisaged in its consultation paper published on 14 October 2011.

The AMEU has encouraged its members to get their tariff applications in as soon as possible for it to be tabled with their municipalities’ budget by the end of May 2012.