Minister gives details of big electricity price cut
The newly announced cuts in electricity prices have been explained in detail by Minister Joel Morgan.
In an interview on Monday, the Minister for Environment, Natural Resources and Transport spoke about the tariff change that was mentioned by President James Michel in his state-of-the-nation address last Friday.
Mr Morgan said consumers in the domestic and small business sectors will see the price of the first 1,000 units of electricity per month reduced, with effect from March 1, so it is only 5% more than it was in December.
This compares with the price increase of 27% that was introduced by the Public Utilities Corporation (PUC) in January.
Giving detailed examples of how consumers will benefit, Mr Morgan said a household that used 150 units of electricity on a 30-amp breaker last month paid R214, but now with the reduction that will be on the bills at the end of March the same number of units will cost R199.
A household that used 300 units last month paid R464, but at the end of March it will pay R384.
Another home that used 400 units and paid R729 will now pay R643.
As for a small business consumer using 300 units a month, before March 1 he would have been paying R1,090 but will now pay R985.
Mr Morgan said the government hopes savings made on the cost of electricity by small business consumers will be passed on to their clients, just as the PUC is doing.
He said the adjustments the public will see on their electricity bills starting at the end of March have been made possible through savings made by the corporation.
This follows a donation by the Abu Dhabi government of two generators worth US $15 million that would have cost the PUC around R180 million to buy. Because this is a grant, it has saved the company from making that capital investment and the saving is being passed on to consumers.
Mr Morgan said the cuts are in two areas – “the small business sector, which we want to become an important motor of the economy, and the domestic sector, which has been hard hit by the January 2010 increase in tariffs”.
He said the government felt the price cut was appropriate provided the PUC could do it. They have been able to pass on the benefits to the consumers as part of the policy of bringing down the cost of living.
Mr Morgan explained that if there are any significant increases or decreases in the price of fuel on the world market in the future, the PUC will have to review its tariffs as electricity production depends largely on the cost of fuel.
Meanwhile, he has refuted allegations that the government is not satisfied with the work the French company Suez is doing to restructure the corporation.
He said there should be periodic performance monitoring in all established contracts to ensure the company is delivering the service agreed.
In the case of Suez, more than six months into the contract it is timely to monitor its performance to ensure the services agreed on are being carried out. There is no reason for the government not to be satisfied with the French company, he said.
Source: NATION 3-3-10