Outrage over Cape Town’s electricity tariff hike

Article from IOL

Cape Town – The City of Cape Town is facing a groundswell of opposition to its increase of the electricity tariff and surcharge, a move which has been labeled as unconstitutional.

The tariff increase and surcharge has sparked outrage from cash-strapped residents and has lead a civic group, a concerned resident and energy expert to take separate action to put pressure on the city and the National Energy Regulator of SA (Nersa) to decrease costs.

The recent increase in electricity tariffs and the levy has seen the cost of electricity rise astronomically, with some residents paying up to 30% more than the 8.8% intended.

Civic organisation STOP COCT, which is spearheading a demand for a public hearing by Nersa, said the recent evaluations of properties had seen some residents slapped with high electricity bills.

Spokesperson Sandra Dickson said: “STOP COCT has received many complaints. People are upset about this.”

Dickson accused the city of not being transparent in the way it set the tariffs, as required by the law.

In July last year, the city introduced a surcharge of R150 for properties with prepaid meters and valued at more than R1 million, as well as those properties worth more than R400 000 with no prepaid meters.

This year, the surcharge was increased to R163.50.

In addition to the surcharge, the city added another surcharge of a flat rate of 10% to the electricity tariffs.

Nersa is now investigating the surcharge.

The city also stopped giving free units of electricity to customers whose monthly usage surpassed 450 units over a period of 12 months.

During the past three years, residents rejected proposed electricity and water rate increases during public participation hearings, but their concerns were ignored as the city implemented increases.

In 2017, then mayor Patricia de Lille postponed the increase after residents raised concerns.

An “Electricity tariffs must fall” has campaign also been launched by a concerned resident to force Premier Alan Winde, the city and mayor Dan Plato to take action.

Two days after its launch, close to 1900 people had supported the petition.

Nersa said it approved the city’s tariff increase application for the period July 1, 2019-June 30, 2020.

The city, according to Nersa, had applied for an average tariff increase of 11.30%.

But the city was adamant that it had only received “provisional approval and had yet to receive a formal, signed letter.

Despite this, it went ahead and implemented the tariff increase.

In addition, it also added a surcharge of 10% and a CPI inflation rate, and claimed that the money derived would be transferred to the rates account.

“In essence, since 2016, the tariffs have been higher than those approved by Nersa. In 2018, the real increase was about 15 to 16%. and now with properties re-evaluated, some residents have found that their accounts have increased by up to 30%,” said Dickson.

The residents now want Nersa to intervene. The call for the public hearing follows a similar one Nersa had with Tshwane residents who were unhappy about the implementation of a surcharge which the regulator had not approved.

Energy expert Ted Blom was looking into taking up the matter on behalf of dissatisfied customers. He believed the requirement that customers should lodge a dispute with their supplier, who in turn would refer the matter to Nersa, would dissuade many from taking action against the city.

Blom said municipalities should provide electricity at cost and should not include mark-ups.

“Both Tshwane and the City of Cape Town increased the fixed cost, which is unfair to residents and to non-users. That’s unconstitutional and against the National Development Plan.” Deputy mayor and mayoral committee member for finance Ian Nielson said the city followed “all the necessary” legal processes, including public participation.

Some residents took to social media to vent their dissatisfaction with the surcharge and tariff increase, while others also questioned the deduction of monies to off-set rates arrears from electricity purchases.