The South African Property Owners Association (SAPOA) welcomes the approval by the National Energy Regulator of South Africa (NERSA) of the 8% annual increase for electricity.
The commercial property sector braced itself for the ultimate percentage increase by NERSA in the face of other industry related costs that put strain on its sustainability and profitability. A percentage much higher than the approved 8% would have proved too much for the sector. What may be charged to the end-consumer by commercial property owners is governed by applicable by-laws, as an end-consumer must be in the same position had he purchased the electricity from Eskom or the local authority.
SAPOA notes that in recent years the bulk tariff has increased at a much higher rate than end-consumer tariffs. A property owner’s ability to recover the management costs are, as a result, under severe strain.
The Chairperson of SAPOA’S Sustainability Committee, Mr. Essop Basha, says: “NERSA’s decision is an important step in the right direction and we are encouraged that NERSA will continue with this approach when reviewing the application from the various municipalities. An emphasis has to be placed on simplifying the various tariff structures and reducing to different number of tariff structures across the country.”
SAPOA CEO Neil Gopal says, “The manner in which public participation was included in debate on the recommended electricity tariff hike was commendable and this input was widely accommodated by NERSA. We hope that while government focuses on its service delivery mandate, it continues to open strategic platforms that pioneer such a mandate while being considerate of the cumulative effect of various utility and operational costs borne by the commercial property sector. Such consideration will ensure the sustainability of the sector which will continue to contribute towards the economy through job creation”.