The Nelson Mandela Bay Business Chamber believes that business and domestic consumers should educate themselves about what Eskom’s proposed 16% increase every year for the next five years means for their budgets and the bottom line.
Acting for the Business Chamber, Angus Clark, head of the Chamber’s Strategic Resources Task Team, will lodge an objection to the National Energy Regulator of South Africa (NERSA) at public hearings in Port Elizabeth on 16 January 2013. “The Business Chamber is going out to bat for business and consumers alike,” says Nelson Mandela Bay Business Chamber CEO Kevin Hustler.
“The bills will only continue to rise as municipalities add on a percentage to the base amount as income. Electricity tariffs are quickly reaching their tipping point. Domestic consumers have to dig ever deeper into their emptying pockets, and businesses face the harsh reality of closing up shop.”
Eskom’s proposed increase in the MYPD3 (Multi-Year Price Determination) will have a negative and significant effect on business. “Energy-hungry businesses will lose their competitiveness, and in some cases even face closure if input costs are not reduced,” maintains Clark. Domestic consumers will not be spared, and the Chamber urges the general public to prepare for monthly electricity costs to effectively double by 2018. “Domestic users currently paying just under R900 per month for electricity will face a R2000 bill for similar usage, come 2018.”
Small and medium business owners will not have an easier time of it as the cost per unit escalates. “Smaller businesses will end up passing the increase on to the customer. Customers will place smaller orders, or make use of their services less often. This places the small business in jeopardy. Businesses close, people lose their jobs, and the buying power of the man on the street diminishes,” says Clark. Projections for medium-sized businesses using 42 MW.h per month see the electricity bills of businesses currently paying just under R50 000 per month escalate to just over R100 000 by 2018.
The Business Chamber will present an objection at the NERSA public hearings in a bid to prevent the potentially disastrous effects of the proposed price hikes. Eskom has applied for the increase to fund its build programmes.
