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Businesses feeling power price pinch

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“For most businesses, these new tariffs are unaffordable and the tariffs need to be changed back to Commercial Conventional.”

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BUSINESSES in Kimberley are feeling the pinch of the new electricity tariffs that came into effect on July 1, with some indicating that their electricity bill has shot up by between 50 to 60%.

Northern Cape Chamber of Commerce and Industry (Nocci) CEO Sharon Steyn (pictured) has called on member businesses that are affected by the new tariff structure to engage with Nocci to determine the extent of the problem.

Steyn said yesterday that Nocci was currently engaging with the Sol Plaatje Municipality regarding the tariff change for businesses from Commercial Conventional (small power) tariffs to Industrial Time of Use tariffs.

“For most businesses, these new tariffs are unaffordable and the tariffs need to be changed back to Commercial Conventional.”

Nocci executive member Jan van Vuuren explained yesterday that there were two different electricity tariff structures for businesses. “There is the Commercial Conventional tariff for small businesses, which is a flat rate, as well as a basic monthly charge of R311,” Van Vuuren said. “There is also a charge for what is known as ‘Time of Use’ consumers, where the cost of electricity is dependant on not only winter and summer tariffs, but also on peak, standard and off-peak tariffs, as well as a basic charge of R1 840 a month.”

According to Van Vuuren businesses could, in the past, elect if they wanted to be charged the Commercial Conventional tariff or the Time of Use tariffs.

“Now, however, the municipality is charging all businesses that have kVA meters according to the Time of Use tariffs.”

He added that businesses were never informed of the new tariff structure by the municipality and there was no consultation in this regard.

“In some instances, businesses, especially the smaller guys, are paying up to 50 or 60% more for electricity. This increased cost has a major impact on profitability and Kimberley is already seeing businesses closing their doors.”

Sol Plaatje Municipality spokesperson Sello Matsie said in response yesterday that the tariffs that the municipality applied for billing had been approved by the National Energy Regulator of South Africa (Nersa).

“The higher billing for the initial two months (of this financial year) is a result of a high winter tariff season per approved schedules. The high seasons tariff is consistent with Eskom charges as our bulk electricity supplier.”

Matsie added, however, that it was expected that for the rest of the summer seasons the billing on electricity would be substantially cheaper.

“We encourage small and Time Of Use (TOU) businesses that cannot keep up with their current electricity accounts as a result of the higher winter season tariff to approach the municipality to make arrangements. In this way billing payments can be made over the period to avoid unnecessary interest and penalties being charged.”

He added that the credit control offices were working around the clock to provide assistance whenever necessary.

Regarding the statement that all businesses with kVA meters were charged Time of Use tariffs, Matsie stated that the method of billing electricity was guided by the municipality’s electricity by-law in relation to the type of meter connection that the customer applied for, tariff policy and council. “However such approval is subjected to Nersa approval and Nersa regulations.”