The City of Cape Town insists that implementing the National Energy Regulator of South Africa (Nersa) guideline to increase electricity tariffs by no more than 15.1%, which is between four and eight cents per unit, would be “unsustainable for the city and would cause a R500 million budget deficit while bringing no relief at an individual household level”. This was in response to a protest by hundreds of residents to the Cape Town’s civic centre on Saturday demanding that the city adhere to the Nersa limit instead of imposing its 17.6% electricity tariff increase.
Cape Town residents who were at the march, mainly from the Cape Flats and townships, decried the high electricity tariffs saying that they are already struggling with the high cost of living. The City of Cape Town described the protest as being politicised by the individuals that were involved. Among those who spoke was the former Cape Town mayor and now member of parliament for the Good party, Brett Herron. In his address, Herron debunked the city’s claims and can afford to lower the tariff to the Nersa standard. “What they won’t tell you is that they have R8.6 billion sitting in the bank and they are scared to lose R500-million. They can’t support poor people with R500-million when they are sitting with R8.6-billion and that is the failure of leadership and that is on the DA,” he said.
Provincial chairperson of the Congress of South African Trade Unions (Cosatu), Motlatsi Tsubane said that the City of Cape Town is arrogant and would not listen to common sense. “They claim that they have decreased the lifeline electricity protection for the poor. But we are told that people get only 3 units of electricity from R10,” said Tsubane, who was quickly corrected by the crowd that R10 gets you 2 units.
“Our women in households cannot keep the lights on because of this barbaric DA government. The saddest part is that pensioners also get 2 units of electricity from R10. I am inviting the mayor to the homes of the pensioners to see that when they punch in the R10 electricity they only get 2 units. When they switch the kettle on, the lights go off,” said Vanessa Nelson from Heideveld Residents Association.
One of the demands of the protest is the delinking of fixed charges and tariff blocks from property values, which they say is a discriminatory practice. Instead, they want all households to pay a flat rate per kWh and for only one block of power consumption to exist. “We demand that affordability must be the only criteria when setting tariffs. The city cannot see the public as a source of profit to fund their ambitious R70-million 2023/24 budget which benefits only a few,” reads the memorandum.
Speaking to Elitsha, the city’s mayoral committee member for finance, Siseko Mbandezi defended the linking of fixed charges and tariff blocks to property values saying that “property values provide a reasonable indicator of financial means and enables the city to structure tariffs in such a way that relief is provided where it is most needed.”
According to Sandra Dickson from STOP CoCT, an organisation that is opposed to the tariff hikes, said that the reasoning around the increase above the Nersa standard is “wrong and flawed”. The MMC for finance said that the increase came as a result of the very same Nersa approving an 18.5% Eskom hike while recommending an increase of 15.1% for municipalities, which according to the city is not sustainable.
Dickson argues that each unit of electricity that is consumed is calculated as follows: 60% is for buying electricity directly from Eskom, 30% is for salaries and overheads and 10% gets transferred to rates. “Because only 60% of the tariffs attract the 18.6% and the 30% should be related to inflation as it relates to salaries. If one averages the 18.6% increase and the 7% which is related to the inflation rate because it is a salary portion, then one gets to the 15.1% that Nersa has recommended,” said Dickson
