Municipalities to feel the heat as Nersa caps electricity tariffs
4 May 2017
Johannesburg - Municipalities relying on an electricity tariff hike are likely to feel the crunch after Nersa ruled on a cap at 1.88% for the 2017/18 financial year, the Organisation Undoing Tax Abuse (OUTA) said on Thursday.
OUTA welcomed the decision by the National Energy Regulator (Nersa) to cap municipal electricity tariff increases at 1.88%, down from an annual increase of 9%.OUTA energy director Ted Blom said most municipalities were budgeting for increases well above inflation of 6% – with some larger entities posting budgets above 10%.
“Given the June 1 deadline for municipalities to publish new tariffs, we expect a massive rush of late applications for Nersa to condone increases above the 1.88% cap.
“South Africa has over 280 municipalities who were most likely relying on another big increase to subsidise other expenses and as such, the crunch is on the horizon," he said.