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The Organisation Undoing Tax Abuse (OUTA), welcomes NERSA’s recent ruling capping Municipal Electricity Tariff Increases for 2017/18 at 1.88% – down from an annual increase of 9%.

The ruling was made after reviewing representations from all affected stakeholders.

Besides the municipalities of Cape Town, Midvaal, Saldanha Bay, and Johannesburg’s City Power, OUTA was the only organisation which made representations on behalf of the public.

OUTA argued the increases should be recalculated off a “Zero base” as discrepancies between various municipality’s tariffs were not justified and increases should not be higher than that granted to Eskom.

Municipal Notices scrutinised by OUTA, indicate most municipalities were budgeting for increases well above inflation of 6% – with some larger entities posting budgets above 10%.

“Given the 1 June 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,” says Ted Blom – OUTA’s Energy Portfolio Director. “SA has over 280 municipalities who were most likely relying on another big increase to subsidize other expenses and as such, the crunch is on the horizon.”

OUTA is also concerned that it was one of only five responders.

“We are concerned that there are over 280 Municipalities in SA, thousands of corporate entities and millions of citizens directly affected by the retail tariff regime, yet only five entities made representations on the Municipal Tariff hike notice to Nersa,” says Ted Blom.

OUTA believes this lack of public involvement can be traced to three factors:-

At a municipal level, gross incompetence and lack of professional management are probably the cause for non-involvement in the process.
At Corporate level, there is too much noise following the ratings downgrade, combined with a feeling of despair that their voices have been ignored in the past or a lack of appetite by business through their various associations to challenge these matters.

At the individual level, a feeling pervades that Government institutions have abandoned people’s needs and usurped their voice with State Capture.

OUTA is accordingly considering various actions to amend the manner in which notices are delivered and the period of such validity. “In a Constitutional Democracy, not only must the voices of the people be heard, it must be seen to be heard,” says Blom. He continued “We will, therefore, endeavour to improve the engagement process between state institutions, which exist to serve citizens and the people of our country who deserve proper service delivery.”

Issued by OUTA