Implementation by the City of Cape Town of a 17% increase in electricity tariffs, higher than the increase recommended by Nersa, angered residents and political parties. file image.
Robert Brook / Getty Images
- Cape Town residents are outraged after it was revealed that the city of Cape Town ran counter to South Africa’s National Energy Regulatory Authority’s recommendation to implement an electricity tariff of 15.1%.
- The city implemented a 17.6% increase, which began on July 1.
- However, Medina says she can’t run Reliable electrical service and implementation of load shedding plans with NERSA recommended lift.
Amid the ever-increasing cost of living, there is growing pressure on the city of Cape Town after it implemented an electricity tariff increase of 17% – greater than the 15.1% recommended by South Africa’s National Energy Regulatory Authority (NERSA).
Political parties and the population, weary as the cost of living continues to rise, have submitted numerous objections to Nersa.
The city executed its budget for the 2023/24 fiscal year on 1 July with a record capital spending budget of R69.9 billion.
But the budget came with higher municipal rates and tariff increases.
The Electricity Tariffs Must Fall campaign group started a petition which had garnered 155 signatures by the time of publication.
“This cannot be allowed, it is unacceptable, unconstitutional and against our rights and human rights,” said Natasha Gerts, a resident of Tavlsegg and founder of the Electricity Tariff Must Fall campaign.
Gertz said the population is already suffering.
She added, “The city is supposed to work for the citizen, but instead, the only income we get should go to the city with no questions asked, and nobody deals with these complaints.”
Sandra Dixon, founder of STOP COCT, added:
This is despite many objections to this during the city’s 2023/24 budget public engagement process. The city also gets away with adding 37.47 “unregulated” cents for every unit of electricity it sells. Accordingly, STOP COCT and others filed a complaint [with] Nersa regarding Cape Town city policy and practices.
Dixon added that the audience was “shamelessly exploited”.
It is unpalatable to hear propaganda of a ‘well-run’ city with ‘clean audits’ while the larger public is shamelessly exploited. [by] This city has its own tariff policies. This is a direct result of a metro that is controlled by one political party, and opposing any of them is ineffective.”
Good Party councilman in charge of finances Anton Lo said municipalities could increase their tariffs above the proposed guideline if they had compelling reasons and motivation to deviate.
The City of Cape Town and the municipality of Ethekwini are among six municipalities that have applied to NERSA to increase electricity tariffs above the NERSA guidelines.
“The city imposed an increase of 17.6% – significantly higher than the 15.1% tariff increase NERSA agreed to for municipalities. After NERSA rejected eThekweni’s proposed tariff increase, Cape Town residents now face the highest tariff increase in the country. The City has significant cash reserves.”
Nersa spokesman Charles Halibela confirmed that the energy regulator had received a number of complaints.
“Nersa is not able to indicate the number of complaints received at this stage, enough to indicate that Nersa receives several complaints regarding the alleged tariff increase implemented by the City of Cape Town,” he said.
Halibela pointed out that Article 15 (2) of the Electricity Regulation Law of 2006 (Law No. 4 of 2006) stipulates that “the licensee may not impose on the customer any other tariff and benefit from provisions in agreements other than those specified or approved by accepted by the regulator as part of its license terms.
Nersa will investigate the complaint in line with its dispute resolution procedures to determine whether the City of Cape Town is in breach of this section.
Eskom implemented an 18.65% tariff increase in April, as awarded by Nersa.
City municipal energy committee member Beverly van Reenen said the tariff increase was legally approved by the council under the Municipal Finance Management Act in May 2023, following a public participation process.
“For the City of Cape Town, this means that buying larger power from Eskom for distribution to the city’s customers costs the city 18.5%. The main issue remains the 18.5% increase in Eskom’s tariff,” she said.
Van Reenen added that the city spends about 70% of its customs revenue buying electricity from Eskom, with the remaining 30% covering the costs of reliable electricity service and plans to end load shedding.
“The city will face an estimated budget shortfall of more than R500 million based on the NERSA indicative tariff increase. This shortfall will make it impossible and unsustainable for the city to operate a reliable electricity service and implement plans to terminate load shedding,” it said.