POLOKWANE – Should the municipality have its way, residents may have to pay more than the 10% increase in electricity as per the draft Integrated Development Plan (IDP) and Budget for municipal services.
This could be implemented at the beginning of the new financial year on 1 July 2017.
However, the final decision lies with the National Energy Regulator of South Africa (Nersa).
Nersa, at its meeting held on 23 February this year confirmed a percentage increase of 2,2% in the allowed increase in electricity tariffs Eskom may ask from municipalities for the 2017/18 financial year.
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Proposed 10% increase to municipal rates
Eskom was allowed an 8% increase in the last three years, but due to the base adjustments in previous years (12.7% for 2015/16 and 9.4% for 2016/17), was only allowed a 2, 2% increase this year following a High Court case.
Polokwane Mayor, Thembi Nkadimeng, the mayoral council and ward councillors on Thursday held a public participation and stakeholders’ consultation meeting for the city cluster to discuss the draft Integrated Development Plan (IDP) and Budget in Polokwane.
The meeting formed part of the municipality’s drive to meet with all residents between 3 and 25 April, to get their inputs and for them to voice their needs in their wards.
Nkadimeng addressed the attendees and draft projects for 2017/18 were discussed before Nazeem Essa, Acting Chief Financial Officer, spoke about the draft budget summary and tariff increases for the new municipal financial year starting on 1 July.
One of the issues touched upon was the proposed 10 % increase on water, sanitation, electricity and waste removal services.
Residents were warned that the proposed price increases, especially of electricity, may differ from the draft plan, as National Treasury has constructed a tariff/cost analysis on the services charged by a municipality.
The municipal tariff guideline increase is developed based on Eskom’s approved bulk price increase of electricity to municipalities and the increase of the municipalities’ cost structures. Hence the approval of the municipal guideline increase is subsequent to the determination of Eskom’s increase.
The benchmarks are developed in order to ensure that tariffs across municipalities are not vastly different and are used in the evaluation of the municipal tariff applications. Municipalities applying for an increase that is above the guideline will have to justify their increases to Nersa.
