The City of Cape Town would run a loss of R500 million if it implemented the proposed 15,1% hike, said Mayco Member for Energy Beverley van Reenen. The metro 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.
Van Reenen said 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. She blamed Nersa’s tariff benchmarking methodology for the backlash, which she said had been reviewed and ruled unlawful in two High Court judgments. The Mayco member said: “In terms of the Electricity Regulation Act Nersa must allow an efficient utility to recover its costs and it has again failed to do this.” The City said it would offer “unprecedented social relief measures for households” in the 2023-’24 financial year, and Lifeline Tariff customers would pay significantly less per unit in the 350 to 600 usage band this winter.
However, lobby groups and opposition parties have not been impressed and the GOOD Party councillor responsible for finance, Anton Louw, said the party would not back down from a fight over the City’s tariff. They urge that Nersa “must intervene and stop the City from placing a massive unnecessary mark-up on the price it is charging consumers”.
“What is actually really alarming about this is that the City had its public participation process in March and 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,” said Stop City of Cape Town’s Sandra Dickson.
