The Sol Plaatje Municipality in its response to the Kimberley Large Business Forum’s (KLBF) sharply-worded letter to the municipal manager and mayor in which it demands the municipality meet urgently and undisturbed with them to immediately to reverse the decade long and latest “sky-high, non-competitive and unfair” electricity tariffs for industry and business, says the concerns are receiving attention.
Thabo Mothibi, municipal spokesperson, says “a vibrant business sector is critical to the economic viability of the municipality. The municipality had lowered electricity tariffs in three categories of industrial users for the current financial year.
“In improving and extending consultations beyond the Integrated Development Plan and budget community consultations, we consulted in the first quarter of the financial year in adopting the Tariff Reference Group.
“The Northern Cape Chamber of Commerce (Nocci), KLBF, Nersa and the Treasury were part of the meetings.
“We establishment the Tariff Reference Group two weeks ago. The group will measure progress with grievances lodged and suggestions put before the municipality. The improvement of service delivery is critical to Sol Plaatje Municipality to attract investors and ensure the survival of existing businesses.
“We intensified disconnection of non-paying government departments and businesses in January 2024. There is no preferential treatment. Payments were received and arrangements were entered, including defaulters with disputed accounts.”
He says the municipality submitted and approved Cost of Supply (Cos) Study that was implemented for the first time in 2023-’24 financial year.
“One key finding from the Cos was the revenue requirements formulae which noted that a 18% subsidy from electricity tariffs resulted in businesses and some other categories being overcharged.
“The Cos ensured that only cost reflective tariffs are proposed to and approved by Nersa with accepted losses of only 10% in the revenue requirement formula.
“The Cos proposes an 8% subsidy to allow a systematic decrease of overcharged tariff categories over three years. This included businesses and subsidised indigent and residential households with a usage of up to 20 amps. The municipality proposed a reduction of 1,63% of tariffs in high demand periods and 3,45% in lower demand periods for small businesses with conventional and prepaid meters.”
According to Mothibi they have reduced basic charges for large power users (lower than 200 kVA) with 25,97%, and with 23,59% and 7,7% for user categories between 200 kVA and less than 500 kVA respectively, and a reduction of 14,72% and 19,23% respectively for large power users at above 500 kVA.
It includes a reduction of 3,21% in winter off peak energy charges.
“These reductions effectively lowered billing accounts for these businesses from 1 July 2024.”
