Shiceka takes on Nersa

2010-03-25 17:53

Cape Town - National energy regulator Nersa was exceeding its mandate by ordering municipalities to cap electricity charges in the wake of Eskom's announced tariff increases, Co-operative Governance Minister Sicelo Shiceka said on Thursday.

"Nersa has said it gives a cap that municipalities can't charge more than 16% in terms of their own surcharges. We believe from our side that it is a bit beyond their mandate," he told a media briefing in Cape Town.

"I will be meeting with the ministers of energy, the minister of public enterprises and Nersa itself to say 'let's discuss this thing because it is going to have devastating implications to municipalities', because you can't just wake up in the morning to a person who has been getting R35 and say you are getting R16 now. How do we address the shortfall?"

He warned the regulator that the government believed its decisions "must not determine the sustainability and the viability of municipalities".

Nersa last month approved a 15.3% tariff increase for municipalities from July 1, followed by 16.3% in each of the two subsequent years, even though Eskom's average tariff would rise by about 25%.

It said it would consider applications on a case-by- case basis by municipal distributors, which instituted a different increase to the 31% approved by Nersa in the last round of tariff hikes.

- Sapa