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A win for all electricity users in the country

Not just business but electricity users throughout South Africa will benefit from a judgement which was handed down yesterday (Tuesday, August 16) in favour of the Nelson Mandela Bay Business Chamber and four energy intensive companies based in the city of Port Elizabeth including Borbet SA, PG Group, Crown Chickens and Agni Steels SA.

Potentially all electricity users will only have a 3.5% increase from next year, as opposed to the 8% which was granted by the National Energy Regular of South Africa (Nersa) to Eskom.

A conservative estimate of the national saving to consumers is estimated to be between R40-billion and R60-billion if the decision is implemented over the remainder of the MYPD3 period.

Nelson Mandela Bay Business Chamber Deputy President and Electricity and Energy Task Team Board Lead MC Botha said while only four companies and the Business Chamber were applicants in the court case, the outcome of the judgment will benefit all users of electricity throughout South Africa.

“The Judgment does not only benefit the particular energy intensive industrial companies, but it benefits each and every user of electricity throughout South Africa. This bold intervention by the Nelson Mandela Bay Business Chamber, and the supporting businesses, was not aimed at benefitting the interest of a small sector of industry, but was aimed at benefitting all users of electricity throughout the entire country,” said Botha.

The Nelson Mandela Bay Business Chamber has over the past year lobbied extensively against unsustainable electricity increases on all available platforms. Businesses in Nelson Mandela Bay have experienced the high cost of electricity in the city to be a major inhibiting factor to their competitive advantage – from small startups to multinational companies.

This week’s judgement means that the electricity tariff for the year starting on 1 April 2017 will potentially be restricted to approximately 3.5%, as opposed to the 8% approved. This is expected to have a knock-on effect on the increase in municipal electricity tariffs due to take place on 1 July 2017.

“No electricity user will be refunded money directly, but the amounts over collected by Eskom in terms of the (now) unlawful RCA increase in the Eskom tariffs, will be refunded by way of a reduction in next year’s electricity tariffs,” Botha said.