Standard electricity prices needed: Nersa

A standardised tariff for electricity resellers is needed to avoid consumers being overcharged, energy regulator Nersa said on Tuesday, 22 July 2014.

“The pressing problem right now is that there is a standardised tariff that they [electricity resellers] should have, otherwise they will continue to charge more than what the municipalities are charging,” the National Energy Regulator of SA’s Thembani Bukula said in Johannesburg.

He was speaking on the sidelines of Nersa’s public hearings on guidelines for the electricity reseller tariffs in Midrand. He is chairman of the panel.

“The pricing policy states that they [electricity resellers] must not charge prices or tariffs that will leave the customers in a less favourable position than if they were supplied directly by the municipality.”

It was a “pressing problem” that needed to be resolved before the tariff review for the next year.

In terms of the law, an electricity reseller is not allowed to charge a consumer more for electricity than the municipality or Eskom would charge, he said.

A reseller is defined as an “unlicensed buyer of electricity from a licensed distributor for the purpose of selling it to the end user within the area of distribution of such distributor at the approved tariff of such distributor”.

There are 2400 different tariff structures in South Africa based on customer mix and area, he said. Bukula said there was no one-size-fits-all approach to tariff for municipalities.

“We have too many different tariff structures. This will affect the average households,” he said.

“You find a situation that people who are in body corporates and places supplied by re-sellers pay more than people in free-standing houses or areas that are supplied by the municipality.

“This new tariff is the one that is going to make the reseller able to sell at the same rate as the municipalities having bought their electricity at a lower rate.”

Bukula said they had received a number of complaints and had gone to resellers to rectify it.

Eskom’s Lerato Legoete said at the hearings that amendments to legislation regulating resellers would reduce customer complaints.

“The customer should not be worse off than if they are supplied directly by Eskom.”

Earthlife Africa’s Dominique Doyle said the organisation had been inundated with calls and messages from people saying they were paying too much for electricity.

She said a woman complained that when she bought electricity from supermarkets she paid much less than when she moved into a townhouse complex. Now she had to pay the body corporate for electricity.

Various interested parties, including municipalities and resellers, made presentations to the panel and gave suggestions on what Nersa should consider.

Leshan Moodliar, from the Association of Municipal Electricity Utilities, told the hearings that municipalities did not have the skills to regulate resellers.

Bongani Dinge, from PEC Utility Management, said illegal connections contributed to costs incurred by resellers, therefore some resellers charged more.

He said Eskom should introduce a discounted reseller tariff.

“A balanced tariff structure will optimise the efficiency and transparency of the management of the electricity utility,” he said.

Nersa’s Bukula said the panel planned to have all processes finalised by the end of the year.

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Standard electricity prices needed: Nersa