City of Cape Town facing battle over its electricity tariffs
News / 12 September 2019, 10:20am / Marvin Charles
Cape Town - Social activists are gearing up for a big fight with the City over its electricity tariffs, and are prepared to drag them to the courts if necessary.
Civic organisation Stop CoCT said it was considering taking legal action against the City for its home-user and surcharge rates. This comes after the City met the National Energy Regulator of SA (Nersa) and the organisation, which had disputed the City’s electricity tariffs.
Stop CoCT founder Sandra Dickson said the City did not address their concerns because the person they had sent to the meeting could not answer their questions.
“The electricity director could not deal with billing issues, the City’s debt collection practices, public participation issues, electricity budget issues or the effect of property values on electricity tariffs.” She said at the end, they had to only discuss the home-user charge and supercharge rates.
For months, the organisation was asking questions around the discrepancy between the City’s implemented tariffs across all blocks versus what Nersa publishes as approved tariffs on their website.
Since 2016, the City’s implemented electricity tariffs have been between 2% and 18% higher than the Nersa- approved tariffs.
“For months, Stop CoCT was asking questions around the discrepancy between the City’s implemented tariffs across all blocks versus what Nersa published as approved tariffs on their website.
“Since 2016, the City’s implemented electricity tariffs were between 2% and 18% higher than the Nersa-approved tariffs,” Dickson said. The City imposed a new electrify tariff in July.
The home-user tariff applies to residents with prepaid meters, living in homes worth more than R1million. It will also apply to residents who have a credit meter, irrespective of the property value.
According to Dickson, there was no mention of the home-user charge when the city’s draft budget was approved back in May.
Energy expert Tim Blom said municipalities had mischievously imposed high rates on consumers without their knowledge.
“All municipalities are under huge strain and everyone is tightening their belt.”
He said the entire process had become an abuse of residents of the city.
“They can fight this in court, but it will strongly depend on the mood of the judiciary on this,” Blom said.
The city is sticking to its guns on its electricity charges.
Les Rencontré, the city’s director for electricity generation and distribution, said: “Nersa’s mandate does not extend to regulating a surcharge under the municipal legislation. It is highly likely that the complaints made to Nersa come in light of other South African cities attempting to introduce a fixed electricity charge as a surcharge to raise additional revenue.
“To reiterate, the city’s fixed charge is not a surcharge. It is for recovering the cost of providing electricity, and no profit is made,” he said.
MMC for energy and climate change Phindile Maxiti said: “No profit is made from the city’s electricity income. Some 65% of the tariff goes towards buying bulk electricity from Eskom. Eskom’s tariff increased by 15.6% compared with the city’s increase of 8.88%.
“We have made considerable provision for vulnerable households through the provision of rates rebates and indigent relief.”