Business to take brunt of Nersa-approved increases.
IN A major climbdown, electricity tariffs in Buffalo City Metro are coming down by 1.11 percentage points, backdated to July 1.
This followed a dramatic exigency report to yesterday’s city council meeting from municipal manager Andile Fani that saw council accept the Nersa approved tariff increases of 7.39%, and not the irregular 8.5% – or 13.1% more – that BCM imposed on July 1.
Late last night BCM municipal manager Andile Fani told the Dispatch: “Council has resolved to comply. We must implement the Nersa recommendations. We cannot continue with the 8.5% increase. We have to comply.”
Another senior BCM source, who did not wish to be named, said mayor Zukiswa Ncitha would have to return to council soon with a national Treasury-approved adjusted revenue budget showing the financial changes resulting from adopting Nersa’s rates.
This would then be put to council for ratification.
Meanwhile, BCM is hoping to get a further reply to its final letter of appeal to Nersa requesting “guidance” which was written on July 4.
Fani wrote in his detailed report: “To date Nersa has not replied.”
But Nersa will not be backing down.
Last night Nersa spokesman Charles Hlebela told the Dispatch: “All licensees need to implement a tariff that has been approved by the energy regulator. There is a regulatory process for licencees that are not compliant.”
He said Nersa was still talking to lawyers about taking BCM to court.
There was a shock when Fani for the first time revealed that business would bear the brunt of the Nersa increases.
Fani said that on June 30 Nersa provided BCM with its ruling on the tariff increases, which included increases for business usage of 16.52% (basic charge), and increases for active energy charges of 11.3 (standard) and 18.5% (off peak).
Fani wrote: “Nersa is focusing on business to absorb a greater proportion of the tariff increase and lighten the burden on low electricity consumers and households.”
But Fani and BCM finance standing committee head alderman John Badenhorst said the city would earn R15.7-million less from the Nersa limit of 7.39%, while upping the rate for business would only earn an extra R58331.
However, when Badenhorst argued that BCM, as a local government, had a constitutional right to govern its own sphere and set its own rates based on sustainability and service delivery principles, councillors did not agree.
Badenhorst pointed out that Eskom had increased its rate to BCM by 8.3%, meaning BCM was “taking money out of the system and putting it into Eskom.”
He said: “There is conflicting legislation.”
ANC councillor Sakhumzi Caga said BCM had to be compliant.
“Was there any internal consultation within council? This puts egg on the face of council. Two months down the line you come to rectify something.”
Xolani Somaca, from one faction of Sanco in BCM, reacted: “We feel vindicated. We met with Nersa three months ago before meeting with BCM, and we were not aware of how Nersa would respond.
“Now that BCM is going to accept Nersa’s rate, BCM must come clean and be transparent. Why did they not inform the public of Nersa’s increases? Did they think residents would subsidise business?”
DA BCM caucus spokesperson Lance Weyer said: “Communities were not communicated with sufficiently.
“BCM cannot implement increases outside of Nersa’s guidelines.
“It’s illegal. It’s not on.
“We are glad that tariffs will be decreased because it will save a couple of rand for the average BCM consumer.”
In a media briefing, BCM mayor Zukiswa Ncitha said she would be “engaging hard with treasury” to absorb the knock of the lower tariff and that there would be further talks with Nersa. –– mikel@dispatch.co.za
BCM backs down on power bill
IN A major climbdown, electricity tariffs in Buffalo City Metro are coming down by 1.11 percentage points, backdated to July 1.
This followed a dramatic exigency report to yesterday’s city council meeting from municipal manager Andile Fani that saw council accept the Nersa approved tariff increases of 7.39%, and not the irregular 8.5% – or 13.1% more – that BCM imposed on July 1.
Late last night BCM municipal manager Andile Fani told the Dispatch: “Council has resolved to comply. We must implement the Nersa recommendations. We cannot continue with the 8.5% increase. We have to comply.”
Another senior BCM source, who did not wish to be named, said mayor Zukiswa Ncitha would have to return to council soon with a national Treasury-approved adjusted revenue budget showing the financial changes resulting from adopting Nersa’s rates.
This would then be put to council for ratification.
Meanwhile, BCM is hoping to get a further reply to its final letter of appeal to Nersa requesting “guidance” which was written on July 4.
Fani wrote in his detailed report: “To date Nersa has not replied.”
But Nersa will not be backing down.
Last night Nersa spokesman Charles Hlebela told the Dispatch: “All licensees need to implement a tariff that has been approved by the energy regulator. There is a regulatory process for licencees that are not compliant.”
He said Nersa was still talking to lawyers about taking BCM to court.
There was a shock when Fani for the first time revealed that business would bear the brunt of the Nersa increases.
Fani said that on June 30 Nersa provided BCM with its ruling on the tariff increases, which included increases for business usage of 16.52% (basic charge), and increases for active energy charges of 11.3 (standard) and 18.5% (off peak).
Fani wrote: “Nersa is focusing on business to absorb a greater proportion of the tariff increase and lighten the burden on low electricity consumers and households.”
But Fani and BCM finance standing committee head alderman John Badenhorst said the city would earn R15.7-million less from the Nersa limit of 7.39%, while upping the rate for business would only earn an extra R58331.
However, when Badenhorst argued that BCM, as a local government, had a constitutional right to govern its own sphere and set its own rates based on sustainability and service delivery principles, councillors did not agree.
Badenhorst pointed out that Eskom had increased its rate to BCM by 8.3%, meaning BCM was “taking money out of the system and putting it into Eskom.”
He said: “There is conflicting legislation.”
ANC councillor Sakhumzi Caga said BCM had to be compliant.
“Was there any internal consultation within council? This puts egg on the face of council. Two months down the line you come to rectify something.”
Xolani Somaca, from one faction of Sanco in BCM, reacted: “We feel vindicated. We met with Nersa three months ago before meeting with BCM, and we were not aware of how Nersa would respond.
“Now that BCM is going to accept Nersa’s rate, BCM must come clean and be transparent. Why did they not inform the public of Nersa’s increases? Did they think residents would subsidise business?”
DA BCM caucus spokesperson Lance Weyer said: “Communities were not communicated with sufficiently.
“BCM cannot implement increases outside of Nersa’s guidelines.
“It’s illegal. It’s not on.
“We are glad that tariffs will be decreased because it will save a couple of rand for the average BCM consumer.”
In a media briefing, BCM mayor Zukiswa Ncitha said she would be “engaging hard with treasury” to absorb the knock of the lower tariff and that there would be further talks with Nersa. –– mikel@dispatch.co.za
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