BUFFALO City Metro (BCM) ratepayers could pay 3% more for their electricity than those in the rest of the country.
The metro has applied to energy regulator Nersa to increase its tariffs above the recently agreed upon 7%. Eskom was granted the 7% increase in charges to local authorities who buy power from it and supply end-users while the increase in charges to end-users was 8%.
BCM’s communication manager Keith Ngesi yesterday confirmed the metro had applied for a 10% increase, saying it needed the additional funds for capital projects to strengthen ailing infrastructure.
The 7% increase comes into effect on July 1. If approved, the additional 3% will also come into effect then.
The other Eastern Cape municipality to apply for a higher increase is DA-led Baviaans Municipality in the Cacadu District.
Baviaans, which had previously applied for a financial bailout from the provincial government when it could not pay staff salaries, has applied for a 16% increase in 2013-14.
Baviaans said the increase would allow it “to recover from three years below guideline increases that impacted negatively on the financial viability of the municipality”.
The two councils are among 10 municipalities countrywide, including the City of Cape Town, which have applied to Nersa for higher electricity tariffs.
Eskom applied to Nersa to have its tariffs increased by 16% but the energy regulator ordered it to halve the amount.
The decision followed extensive countrywide public hearings by Nersa earlier in the year, when consumers lambasted Eskom’s application.
In July 2011, electricity tariffs in BCM increased by 20.3%.
The metro’s electricity challenges have long been documented, with consumers experiencing more and more weekly outages, especially during winter.
It was reported last year that if the single, aging municipal power line was damaged, the city centre, hospitals, schools, and other essential services could be down for as long as two weeks. At the time, metro city manager Andile Fani called the situation an emergency.
Executive mayor Zukiswa Ncitha last year said the metro was expected to spend R276-million on infrastructure in the 2012-13 financial year.
After failing to maintain the city’s electrical infrastructure over the years, BCM now faces a massive R650-million maintenance backlog.
If it is not rectified, the metro will be hit with systemic power failures as the aging and failing equipment struggles to keep up with the electrical demand brought on by colder weather, according to BCM’s 2012-13 Integrated Development Plan (IDP).
BCM supplies electricity in the East London and King William’s Town areas while Eskom supplies electricity to the remaining rural areas under the metro’s jurisdiction.
Although struggling to spend the electricity infrastructure grant, Ngesi said one of the reasons for asking for a higher increment is that the metro’s government grant was not high enough to solve all the electricity troubles in the municipal area.
“Yes, it is correct that we have made the application to be allowed to increase our electricity tariffs by 10%.
“Over and above the agreed 7% increment, the 3% will be ring- fenced for electricity bulk infrastructure and upgrade if approved,” said Ngesi.
“We understand the plight of our consumers, but one of the reasons we are pushing for this hike is due to the fact that we are receiving limited grants from the national government for our electricity infrastructure.”
Public hearings on the applications are scheduled to be held in Pretoria on Friday.
Border-Kei Chamber of Business executive director Les Holbrook said the situation the metro found itself in was of its own making and that much of the backlogs were not as a result of funding.
“The backlogs are more a symptom of irregularities and inefficiency in BCM, including in the supply chain,” said Holbrook. —
BCM asks Nersa for higher tariff
The metro has applied to energy regulator Nersa to increase its tariffs above the recently agreed upon 7%. Eskom was granted the 7% increase in charges to local authorities who buy power from it and supply end-users while the increase in charges to end-users was 8%.
BCM’s communication manager Keith Ngesi yesterday confirmed the metro had applied for a 10% increase, saying it needed the additional funds for capital projects to strengthen ailing infrastructure.
The 7% increase comes into effect on July 1. If approved, the additional 3% will also come into effect then.
The other Eastern Cape municipality to apply for a higher increase is DA-led Baviaans Municipality in the Cacadu District.
Baviaans, which had previously applied for a financial bailout from the provincial government when it could not pay staff salaries, has applied for a 16% increase in 2013-14.
Baviaans said the increase would allow it “to recover from three years below guideline increases that impacted negatively on the financial viability of the municipality”.
The two councils are among 10 municipalities countrywide, including the City of Cape Town, which have applied to Nersa for higher electricity tariffs.
Eskom applied to Nersa to have its tariffs increased by 16% but the energy regulator ordered it to halve the amount.
The decision followed extensive countrywide public hearings by Nersa earlier in the year, when consumers lambasted Eskom’s application.
In July 2011, electricity tariffs in BCM increased by 20.3%.
The metro’s electricity challenges have long been documented, with consumers experiencing more and more weekly outages, especially during winter.
It was reported last year that if the single, aging municipal power line was damaged, the city centre, hospitals, schools, and other essential services could be down for as long as two weeks. At the time, metro city manager Andile Fani called the situation an emergency.
Executive mayor Zukiswa Ncitha last year said the metro was expected to spend R276-million on infrastructure in the 2012-13 financial year.
After failing to maintain the city’s electrical infrastructure over the years, BCM now faces a massive R650-million maintenance backlog.
If it is not rectified, the metro will be hit with systemic power failures as the aging and failing equipment struggles to keep up with the electrical demand brought on by colder weather, according to BCM’s 2012-13 Integrated Development Plan (IDP).
BCM supplies electricity in the East London and King William’s Town areas while Eskom supplies electricity to the remaining rural areas under the metro’s jurisdiction.
Although struggling to spend the electricity infrastructure grant, Ngesi said one of the reasons for asking for a higher increment is that the metro’s government grant was not high enough to solve all the electricity troubles in the municipal area.
“Yes, it is correct that we have made the application to be allowed to increase our electricity tariffs by 10%.
“Over and above the agreed 7% increment, the 3% will be ring- fenced for electricity bulk infrastructure and upgrade if approved,” said Ngesi.
“We understand the plight of our consumers, but one of the reasons we are pushing for this hike is due to the fact that we are receiving limited grants from the national government for our electricity infrastructure.”
Public hearings on the applications are scheduled to be held in Pretoria on Friday.
Border-Kei Chamber of Business executive director Les Holbrook said the situation the metro found itself in was of its own making and that much of the backlogs were not as a result of funding.
“The backlogs are more a symptom of irregularities and inefficiency in BCM, including in the supply chain,” said Holbrook. —
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