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 Less
than a year after a 31.3% price hike, the National Energy Regulator of
South Africa (Nersa) last week approved an additional 24.8% rise, with
further increases in the pipeline: 25.8% in 2011 and 25.9% in 2012. According
to Rennie Property, South Africa's leading specialist commercial property
management company, this will have a significant impact on the tenants
of commercial property and as a result, the owners as well.
So it is now more important than ever before for owners, property managers
and tenants to work together to reduce electrical expenditure. Ironically,
with an upswing in the economy, increased activity is helping to drive
electrical use this year.
Although Nersa did not simultaneously introduce the controversial energy
conservation scheme penalties for large electrical users, it is expected
that this may still be launched later this year.
We are still waiting for the details of the price rise, and just how
commercial property will be affected. However it seems likely, that similar
to last year, commercial property and larger residential users will contribute
through higher rates towards subsidies for low-income domestic users.
Unsurprisingly, electricity continues to be the largest operational cost
for commercial property, according to the August 2009 South African Property
Owner's Association (SAPOA) report. Expenditure on electricity rose to
more than 27% of total opex, from 22.6% in December 2008.
Henry Truter, director at Rennie Property, said: "If the 2009 price
hikes were a wake-up call to the property industry, these latest price
hikes are a startling reminder that power consumption needs to be high
on property owners', managers' and tenants' agendas.
"The expected increases over the next few years means the cost per
square meter for electricity in a commercial building can go up to R 30
or more.
"Last year we advised stakeholders on how to set up an energy management
plan for their buildings, and this year we will continue to work with
owners and tenants to help them reduce power consumption, within the scope
of their individual situations."
South Africa's power utility, Eskom, requested the price hike in order
to fund a R 385 billion capital expansion plan over the next five years.
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Newsletter:
3 February 2012 to 10 February 2012 - Krugersdorp, Gauteng, South Africa
