City Power will raise the price of electricity by nearly 12 percent this week. In return for getting permission to add less than 1 percent extra to the increase, the City of Joburg power utility must explain how it will cut electricity losses.
The National Energy Regulator of SA (Nersa) said on Wednesday it had approved an average tariff increase for City Power of 11.57 percent, with limitations to some of the tariffs.
As part of the approval, “the municipality must submit a report on how the high energy losses will be reduced by September 30”, said Nersa.
City Power loses nearly a fifth of the electricity it buys from Eskom, a loss of about R1.2 billion in 2010/11.
City Power applied for a tariff increase of 11.93 percent, which would result in a 14 percent increase in revenue. This was slightly higher than Nersa’s guideline increase for all municipalities of 11.03 percent. The increases came into effect on Sunday.
A total of 45 municipalities or their power utilities applied to Nersa for increases higher than Nersa’s guideline. On Wednesday, Nersa issued decisions for the 20 municipalities that wanted increases high enough to require public hearings.
The highest increase requested was Midvaal’s 25.04 percent, partly owing to errors in Eskom’s metering equipment. Nersa approved an increase of 17.95 percent.