Randburg-based small and medium businesses are calling on the government to review the current electricity pricing model as it has become unaffordable. The call was made following the announcement by the National Energy Regulator for South Africa (NERSA) that it will hike electricity tariff by 3% over the next two years. The businesses indicated that the incoming increase will further cripple their businesses as they are still reliant on the power grid to continue operating.
The businesses made the call following a survey that was conducted by the Randburg Chamber of Commerce and Industry (RCCI) following Nersa’s announcement. The survey which was carried out through a questionnaire revealed how small businesses are still heavily dependent on the power grid making them more vulnerable.
About ten member businesses took part in the survey with 70% indicating that government through the ministry of electricity should review the current model that further cripple the already cash strapped consumers.
Below is the questionnaire and some of the responses from member businesses:
|
Do you think your company’s energy efficiency measures are well intact to deal with the situation? |
Yes, from a capacity perspective however these have a drastic financial impact on us as small business and one which we cannot simply pass onto clients. |
No |
Not in the ten years to come |
Not necessarily, the 3% tariff increase will definitely be a dent in my company’s overheads. |
No |
|
How reliant are you on national grid supply in percentage terms? |
100% |
100% |
100% |
95% dependent |
100% |
|
Which areas of your operations consume more electricity? |
Day to day activities are pretty limited and the use of electricity is only used when needed. |
Production |
All areas |
equipment and appliances |
Production and appliances |
|
What government interventions are needed to remedy the situation? |
As I understand that was an error by NERSA and their calculations. NERSA should fund this shortfall and take on the additional expense without claiming it back from the customers impacted. |
None. We need alternative energy sources, government has failed. |
Government must improve electricity markets |
Provide consumption rebate through taxation or lower the tariffs |
Review the current pricing model, open more markets for fair competition |
|
Does your company have a net zero strategy? |
NO – Being a small business most off-the-grid solutions are out of reach. |
No |
Not at the moment |
No |
No |
The table above shows how these businesses are still reliant on the power grid and the impact the tariff hikes will have on their day to day operations. Not a single business has the capacity to operate outside the power grid and none of them have net zero strategy.
While the mister of Electricity and Energy Kgosientsho Ramokgopa has recently indicated that such a review is likely to take place, the new price determination model must correct the following:
- Insufficient free basic electricity
- Lack of support for own generation
- Consumers subsidising Eskom’s financial issues and operational failures