The Nelson Mandela Bay Business Chamber has joined the Pietermaritzburg and Midlands Chamber to challenge the methodology used to determine electricity tariffs.
The two Chambers filed papers in a joint court challenge against the National Energy Regulator, Nersa.
“The methodology is based on guidelines and benchmarking rather than on the cost of supply which is being stipulated in the legislation,” they said in a statement.
“This methodology is thus an enabler for municipalities to implement excessive tariffs and then to utilise this to fund escalating electricity losses which are the result of their own inefficiencies, among which includes the lack of maintenance of infrastructure as well as rampant cable theft.”
“This has resulted in tariff differentials between distributors in South Africa being as high as 60%, creating unacceptable regional distortions in electricity costs across the country,” the Chambers said.
The CEO of the Nelson Mandela Bay Business Chamber, Denise van Huysteen, said “the continued unlawfulness of the municipal electricity tariffs could lead to uncontrollable escalations from current tariff levels.”
Van Huysteen said business is under tremendous pressure in relation to electricity pricing as Eskom is applying for increases exceeding 20%.
“In such an environment, continued excessive mark-ups from Municipalities will exacerbate pressure on Municipal consumers and in particular on businesses who are dependent on electricity for the continuity of their operations,” she said.
The two Business Chambers have participated in year-long consultations on this issue where Nersa has confirmed that they will not review their methodologies without a legal challenge.
“We have therefore determined that we have no other option but to embark upon a legal challenge to halt the implementation of unlawfully high tariffs, which will result in the industry paying for inherent inefficiencies in the system,” said Melanie Veness, CEO of the PMCB Chamber.
