BCM’s projected revenue collection for the current financial year decreased by R21.2m after the National Energy Regulator of South Africa (Nersa) did not approve a 6.84% hike on electricity tariffs.
BCM applies annually to Nersa to OK its electricity tariffs. This year, instead of the 6.84% across-the-board increase it wanted, Nersa approved an increase of 5.1% for domestic credit meters 1A, domestic prepaid 1B, domestic free basic electricity prepaid 1B, large power users 11kV (HV) 3B and large power users 400V (LV) 3A. Metro manager Andile Sihlahla said in a report tabled before council last month: “Implementation of the Nersa [approval] will reduce the annual revenue forecast by an amount of R21,203,666.”
In a letter sent to BCM in June, Nersa CEO Chris Forlee said the metro must bring its tariff levels down to be in line with its approved benchmarks. “Implementation of tariffs without approval of the energy regulator is a contravention of the licence conditions issued to you,” wrote Forlee, adding: “The municipality must curb energy losses to be in line with Nersa benchmarks. A report on the measures taken to address the losses must be submitted to Nersa on a quarterly basis commencing on 30 September 2018.”
As a remedial action to the revenue decrease, Sihlahla proposed that money should “be taken from the funding that was ring-fenced for funding unfunded critical posts”.
The DA expressed concern about not filling critical posts.
DA councillor Geoff Walton said a decrease of R21.2m in revenue would have “serious financial implications”.
“We opposed the proposal and expressed concern that the decrease in expenditure would be taken from the funding that was ring-fenced for the unfunded critical posts. It was not clear how critical these posts were or what posts they were,” he said.
Asked when BCM would fill the critical positions spokesperson Samkelo Ngwenya said the issue of vacant posts was a separate matter, not related to Nersa and tariff increments.
He said: “Rates are an important factor in keeping our city running, hence the need for them to be regularly updated to keep up with factors like inflation and the rising costs of service delivery.
“Posts and progress on their filling is being handled at various institutional structures, including the local labour forum, and reports are submitted on the institution’s highest decision making body.”..