Bay business rejects Eskom tariff hike
THE Nelson Mandela Bay Business Chamber will be fighting to preserve jobs in the Bay when it opposes the higher electricity tariffs proposed by Eskom in Johannesburg today.
A delegation representing businesses in the Bay will be giving a presentation at the National Energy Regulator (Nersa) public hearings on Eskom’s selective reopener application for the third multi-year price determination at the Nasrec Expo Centre.
Nelson Mandela Bay municipal electricity and energy department head Silby Mathew will also be at the hearing, but only as an observer.
The business chamber will be objecting to the proposed increase on the basis that it will be detrimental to the sustainability and competitiveness of the metro and to job preservation in the region.
“The reason [the chamber] is opposed to tariff increases is simple – we want to ensure the sustainability and competitiveness of our businesses to preserve employment in the city,” chamber chief executive Kevin Hustler said. He said chamber member companies collectively employed about 60 000 people.
“Electricity prices have increased fourfold in [the] Bay since 2008,” he said.
“The effect of such increases on the economy has been devastating in terms of employment and deindustrialisation.
“Collectively, five companies in the manufacturing sector had already shed 950 jobs between 2010 and 2012 in the city because of the high cost of electricity.
“Compounding this, there is uncertainty around future electricity supply, which is affecting local investor decisions and damaging the confidence of potential foreign direct investors,” he said.
The chamber said earlier yesterday that in its submission to Nersa, which had already been lodged, it rejected the tariff increases requested by Eskom, and also considered their approval unlawful, deeming the public participation process flawed.
The chamber said it also strongly objected to the implementation of the environmental levy by the Treasury, which would significantly impact on the cost of electricity and the competitiveness of business.
It had also pledged to join the business community after the hearing in continuing to oppose “uncompetitive higher electricity rates in the city” through a number of activities, including lobbying and mobilising civil society.
Hustler said the chamber would encourage the seeking of sustainable solutions to ensuring that the city’s power supply was reliable and competitively priced.
Eskom’s selective reopener application is for a total price increase of 25.3% for the 2015-16 financial year.
This will consist of the 12.69% already approved by Nersa, the 10.1% “selective re-opener” for open cycle gas turbines and the short-term power purchase programme, as well as 2.51% for the increase in the environmental levy by 2c/kWh.
Municipal spokesman Roland Williams said last night the municipality was not opposing the increase.
The council had not yet met on the issue and the city could lodge objections through a body like the SA Local Government Association.