Electricity Tariffs

Melanie Veness:  PCB CEO

The matter of increasing electricity tariffs is bound to cause tension, any way one looks at it. The municipal officials think that business is probably going to be unhappy with whatever increases they put in place, because no cost increase is ever welcomed, and since they have calculated increases to balance their budget, they are not particularly interested in hearing what business (or other ratepayers) have to say.  They may communicate, but in the case of our local municipality, they listen and then just implement the increases that they have already decided on.  This can't be considered consultation, and in my view, business is justified in feeling aggrieved.

And this year Pietermaritzburg businesses have more reason than usual to feel unhappy. The Chamber approached the City early about tariffs, and asked that we be allowed to have a look at the budget with a view to identifying areas of cost savings, so that the full burden of the Eskom tariff increases need not be passed on to business. The Municipal Systems Act makes provision for this kind of meaningful consultation. Despite agreement to this effect, consultation didn't happen.

Business is already unhappy with the security and quality of supply that costs them hours of production and significant machinery replacement costs as a result of electricity surges.  To have the municipality pay lip service to engagement, rubs salt in the wounds.  Msunduzi's poor management of resources resulted in the city being put under administration and instead of addressing the internal issues to sort out the situation, the administration team looked to recover as much additional income as possible from the private sector.  One of the ways that they chose to do this, was to terminate the electricity incentives from industry. The abrogation of incentives and the higher tariffs effectively handed businesses a double whammy that put high electricity users under enormous strain.

Business is operating in a challenging environment without this additional burden. Job losses are a looming reality and in view of the number of jobs already lost, shouldn't government be trying to make it easier for business to function?  One also has to ask at this point, whether it is justifiable for Eskom to increase the costs to local municipalities to the extent that they have, when they are declaring the kind of the profits that they are?

Our new mayor has committed to engage with business on this issue, and we are hopeful of some meaningful engagement.  Since electricity is of such relevance to our business community, we have invited Mpho Makwana, the immediate past Chairman of the Board at Eskom to address guests at the induction of our new Chamber President on August 4. I believe that he is an engaging speaker and I am sure that his insights will be both interesting and enlightening.  Business people interested in attending the function to hear Makwana are most welcome to contact our office. 

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