Cape Town - As anger and frustration build over the City’s 17.6% electricity tariff hike, the National Energy Regulator of South Africa (Nersa) has said it continues to receive numerous complaints calling for the increase to be rejected, and has put its dispute resolution team on the case.
However, Nersa spokesperson Charles Hlebela said Nersa would investigate the complaint in line with its dispute resolution procedure to establish whether the City of Cape Town was in breach of this section or not.
He said the process could take “two to four months” before an investigation into the electricity tariff complaints from Cape Town were completed.
Lobby groups and political parties are angry and spoiling for a fight over the City’s recent increase, which exceeds Nersa’s approved rate increase of 15.1% for all municipalities.
Earlier this month, after similar complaints Nersa ruled that the eThekwini Municipality could not impose an 18.49% tariff increase for electricity and had to stick to the 15.1% recommended increase.
The new electricity tariffs came into effect more than two weeks ago, on July 1. What they mean is that if on June 30 you paid R161.90 for 150 units of electricity, from July 1 you would now have to pay R190.40.
Last week, the City stood its ground and insisted that its electricity tariff of 17.6% was legally approved by council in terms of the Municipal Finance Management Act in May, following a public participation process.
The City argued that it spent about 70% of its tariff income to buy electricity from Eskom, with the remaining 30% covering the costs of a reliable electricity service and plans to end load shedding.
Mayco member for Energy Beverley van Reenen blamed Nersa’s tariff benchmarking methodology, which she said had been reviewed and ruled unlawful in two high court judgments.
Van Reenen said: “In terms of the Electricity Regulation Act, Nersa must allow an efficient utility to recover its costs. It has again failed to do this.”
She said the City would run a loss of R500 million if implemented the proposed 15.1% hike.
The GOOD Party councillor responsible for finance, Anton Louw, said the party would not back down from a fight over the City’s tariff, and that Nersa must intervene and stop the City from placing a massive unnecessary mark-up on the price it charges consumers.
Louw said Nersa has accepted GOOD’s complaints and that Van Reenen’s remarks were out of touch with the daily realities faced by the City’s poor and middle-income households. He said Van Reenen had avoided mentioning that the City was sitting with a surplus of just under R10 billion in the bank.
EFF councillors Ntsikelelo Tyandela and Mzubanzi Dambuza said in a statement that the City’s hike was a “nonsensical and capital-driven increase, and nothing but economic theft, and should be treated as such. It is high time to remind the DA that it does not run an autonomous state. Instead, it is just a political opposition party presiding over provincial and municipal responsibilities in a democratic country guided by national laws.”
Despite this, a statement from the City said it would be offering “unprecedented social relief measures for households” in the 2023/24 financial year, and that Lifeline Tariff customers would pay significantly less per unit in the 350 to 600 usage band this winter. However, lobby groups have not been impressed.
Lobby group Electricity Prices Must Fall has launched a petition against the tariff hike, and has applied for permission to picket the City on the issue.
Spokesperson Natasha Greste said: “The rand per unit is too high. R3.51 per unit, of which R10 only gets you two units. This cannot be allowed, it is unacceptable. Citizens are not being considered, their expenses are not being considered.”
While waiting for permission for the picket, Greste advised members of te group and Capetonians in general to forward their complaints to the mayor’s email, and if they received no response, to forward them to Nersa.
Stop City of Cape Town founder and spokesperson Sandra Dickson said: “What is actually really alarming about this is that the City had its public participation process in March. Nersa came out with their increase in April and the directive was given early in June.
“So therefore, it did not form part of the whole budget process of the City, and is therefore more shocking that the City just plainly ignored Nersa’s directive.”
mwangi.githahu@inl.co.za