The national energy regulator (Nersa) is seeking legal opinion on how to stop Buffalo City in the Eastern Cape from increasing electricity tariffs by an average 8.5%, instead of the approved 7.39%.
Buffalo City confirmed to Moneyweb that it notified Nersa in writing of its plans to implement the higher increase from July 1 this year as approved by the metro’s elected council and in defiance of the regulator’s decision to limit the increase to the guideline of 7.39%.
The council says the difference between the 7.39% and 8.5% will be ring-fenced for its capital infrastructure programme.
Nersa limited the increase after earlier complaints from the business community that the high cost of electricity is detrimental to business.
Buffalo City is home to the Mercedes-Benz plant where its new C-Class model is being manufactured and many related industries.
The decision by Buffalo City is unprecedented in recent years and may pave the way for other municipalities to do the same if Nersa doesn’t act decisively.
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