BCM power hike hope foiled

BUFFALO City Metro’s hopes of squeezing more money out of commercial and industrial customers for electricity use has backfired with the National Energy Regulator of South Africa’s (Nersa’s) refusal of its application to increase the tariff by 7.64% this financial year.

While former BCM mayor Alfred Mtsi announced in April that the high 12.2% electricity increase in 2015-16 financial year would be decreased in July to 7.6%, Nersa has instructed the metro to decrease it even further to 6.6%.

The energy regulator said the tariff was “already above the approved benchmarks [and] the 2016-17 approval is limited to the Consumer Price Index (CPI) inflation”.

The tariff for large power users – highlighted as commercial or industrial – was approved at a rate equal to the CPI inflation of 6.6% after Nersa approved the tariff hike in June, just before the new financial year started in July.

As a result of Nersa’s decline of the the 7.64% increase, acting city manager Nceba Ncunyana said the implementation of the approved tariff for commercial and industrial customers would reduce the metro’s revenue forecast and the financial year budget would have to be adjusted.

He urged the BCM council to approve the revised tariff for the commercial and industrial users “as directed by Nersa”.

Due to massive electricity losses in the metro mainly due to izinyoka, the national energy regulator further instructed BCM to submit a progress report on curbing “high energy losses”.—