South Africa's National Treasury will host hearings during April into what South Africa's municipalities should be allowed to add as an additional surcharge over and above the electricity tariff increases granted to power utility Eskom, Department of Energy DG Nelisiwe Magubane revealed on Tuesday.

Speaking to members of Business Unity South Africa she indicated that that, while the department concurred with Cooperative Governance and Traditional Affairs Minister Sicelo Shiceka assertions that municipalities had the legal right to charge a surcharge, it also felt that the energy regulator had acted within its mandate in setting guidelines to the municipal increases.

In fact, Shiceka has argued that the National Energy Regulator of South Africa (Nersa) went beyond its mandate by setting a cap, which could have "devastating implications" for municipalities.

However, Magubane argued that Nersa - which set a municipal guideline increase of 15,3% from 2010/11 when announcing that Eskom's tariff would rise by an average of 25% a year over the next three years - had acted within its mandate.

"It's not an either or situation. Nersa was expressing a view within the scope of its mandate," Magubane asserted.

"But, the National Treasury has called a hearing where they will decide on the level of the surcharge that can be applied by the municipality and that will then form part of the approval by Nersa," she said, adding that the hearing will be held in mid-April.

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