Nersa proposes 7.47% tariff hike from 1 July with no public participation

Nersa proposes 7.47% tariff hike from 1 July with no public participation

Nersa is providing a guideline to municipalities regarding the percentage hike that is expected to be implemented compared to existing tariffs. This is considered a controversial method of tariff setting, reports The Citizen.

There are reportedly tariff benchmarks for different customer categories. There are two legal challenges to the method being used by Nersa. It might not work out in the regulator’s favour.

Nersa has been challenged by a number of energy users in the Madibeng municipality in the North West. The challenges are over alleged unlawful profits on electricity sales. It has been alleged that Madibeng has been using the profits to cross-subsidise other services.

The energy users hope that the court declares Madibeng’s tariffs for a number of years are deemed unconstitutional, unlawful and irrational. This is on the basis that the regulator allegedly acted beyond its mandate.

This case has been postponed indefinitely.

Second legal challenge for Nersa’s methods

The Pietermaritzburg and Midlands Chamber of Business (PMCB) and Nelson Mandela Bay Business Chamber (NMBBC) have challenged Nersa as well. These municipalities do not want the regulator to use the tariff setting method it has chosen.

The second legal challenge arises from the Nelson Mandela Bay Business Chamber (NMBBC) and the Pietermaritzburg and Midlands Chamber of Business (PMCB). These municipalities are challenging Nersa’s use of the historic tariff setting method.

No court date has been set for the PMCB and NMBBC cases.

Nersa hopes to finalise the benchmarks and guidelines in early May. It did, however, say that time pressure means there will be no public hearings. The Democratic Alliance (DA) shared that it will be writing to the regulator to request that it honours the Nersa Act.

Meaning that the energy regulator should allow South African citizens to share their thoughts on the proposed tariff increase.

»Nersa proposes 7.47% tariff hike from 1 July with no public participation«

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