Government must protect consumers against electricity price hikes

Trade and Industry Minister Rob Davies says he wants a cap imposed on the mark-ups that municipalities are allowed to charge on electricity. Somebody should tell the Minister that the National Energy Regulator (Nersa) already has regulations in place to protect consumers from excessive electricity surcharges by municipalities (see Business Day report). 

We do not need another layer of bureaucracy to enforce caps; we need a national energy regulator that is empowered to enforce regulations. 

Nersa stipulates that municipalities may not impose a surcharge higher than 16.6% above the price at which they buy electricity from Eskom. The Minister confirms that certain municipalities charge consumers as much as 20% to 30% more than the price paid to Eskom. We have received information that in certain cases prices balloon to as much as 115% higher than the Eskom price. 

With Eskom being the only electricity supplier in South Africa, Nersa's price cap is the last line of defence against completely unaffordable electricity. 

Instead of decreeing new price caps, government should strengthen Nersa to enforce those regulations that are already in place to protect consumers. Should proposed changes to the Electricity Regulation Second Amendment Bill (ERA) be enacted, Nersa's powers would be curtailed even further. Minister Davies should lobby against these changes.

I will be writing to Minister Davies to ask for clarification on his comments and to suggest that steps should be taken to ensure that existing regulations are enforced in the interest of South African consumers. 

Statement issued by David Ross MP, DA Shadow Deputy Minister of Energy, September 17 2012

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