The letter ("Tariff increases will kill incentives to save electricity and water", Cape Times, May 8) refers.
The writer claims that the proposed introduction of a daily tariff for homes valued at over R1 million, and the proposed withdrawal of universal free water allocations, would remove the incentive to save water or cut electricity consumption.
The writer also says the infrastructure required for Cape Town to grow should be paid for only by "new entrants to the market" as existing residents have already paid.
The fact is that the tariffs are still primarily based on a consumptive charge and thus the incentive remains for users to reduce their consumption.
The more one uses the more one will continue to pay.
The cost of maintaining infrastructure and operating the distribution network remains the same no matter how much electricity is used on the property, but under the current tariffs only those who use 600 units or more are fully covering the costs associated with servicing their homes.
Thus the city council has proposed the reintroduction of the daily tariff to ensure that those who retain the benefits of a connection to the grid contribute adequately to its operation and maintenance.
Infrastructure in new suburban developments, including a contribution to upgrading of bulk infrastructure, are paid for by the developer, and thus by the “new market entrants”.
The daily charge is aimed at operation and maintenance, refurbishment and replacement costs, not at new extensions.
The city council continues to facilitate the uptake of renewable energy, as shown by our status as the first municipality to develop a tariff to accommodate small scale embedded generation (SSEG).
Because SSEG is only affordable to those who can gain access to the capital, we cannot have a subsidised SSEG tariff, or lower-income residents would be subsidising higher income consumers.
With regard to the proposed removal of the free water allocation for non-indigent residents, the current approach where high-income, low consumption users are not paying for water is not sustainable, specifically when considering the permanent changes that many consumers are making as a result of the drought.
While the water is proposed to no longer be free, the price for the first 6kl will be R4.56/kl of high quality potable water.
This proposed charge is far below the actual cost of delivering water and increases the incentive to save.