Small businesses cannot absorb the increased costs in electricity, says the Cape Chamber of Commerce. The chamber is dealing with growing complaints from small business owners about the financially crippling electricity tariffs implemented by the City of Cape Town.

Peter Haylett, the chairman of the Chamber’s Industrial Focus Portfolio Committee, said his department held a meeting with the City of Cape Town as a result of an overwhelming number of queries from concerned citizens.

During the meeting, the City had acknowledged that although it had met all legal requirements in the implementation of tariff increases, the obscure part was the serious and excessive charges against small users who were not on prepaid meters. The charges mean that some small users are being forced to fork out up to a further R600 a month.

Despite the fact that there was an upfront cost for the installation of prepaid meters, he said it made more financial sense for business owners to switch to prepaid meters. He admitted it was not a change many business owners would want to undertake, but stressed it would be the most advisable.

“The obvious thing is to go onto the prepaid meter. Take the pain for one month, and then go back to a lower tariff,” he said.

Haylett said the City were under the belief that they had sufficiently distributed the information pertaining to the changes. But he said this was clearly not the case in many instances, and they had later acknowledged that.

“They [City] admitted it hadn’t come across as they thought it had. So you’ve got people who are getting a surprise, and people don’t normally like surprises,” he said.

At present, he said Eskom and the City were essentially ‘in a hard place’, because they had to deal with a situation whereby electricity sales were decreasing. This was as a result of top end users finding alternative methods to acquire that power. He fingered this as one of the reasons both Eskom and the City were resolving to electricity tariff increases.

“If you take a look around, there are a lot of businesses in the office blocks that are now putting solar panels on their roofs. You are taking the high income part of the whole electricity spectrum, and removing it from the cash flow of the Eskom’s of this world,” he said.

Haylett also expressed concern that if the tariffs were already negatively impacting small business owners, it would likely get worse as price hikes kicked in.

“If that is impacting on businesses now, it is going to do so even more in a year or two down the track,” he said. VOC (Mubeen Banderker)