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9.61% electricity tariff increase is too high - Cape Town Mayor

Cape Town mayor Geordin Hill-Lewis. Picture: Ayanda Ndamane African News Agency (ANA)

Cape Town mayor Geordin Hill-Lewis. Picture: Ayanda Ndamane African News Agency (ANA)

Published Feb 24, 2022


Cape Town - Despite the National Energy Regulator of SA (Nersa) awarding Eskom less than half of the increase in electricity tariffs it originally applied for, Cape Town Mayor Geordin Hill-Lewis believes it is still too high for Capetonians to afford.

On Thursday, Eskom said it noted the revenue determination on the increase of electricity prices at 9.61% handed down by Nersa.

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“The financial implications on this decision on Eskom’s long-term sustainability will need to be further understood. It is understood Nersa considered the impact on consumers and the financial sustainability of Eskom as it made its decision,” Calib Cassim, Eskom’s chief financial officer, said in a statement.

The new increase to electricity prices is effective from April 1.

The state-owned public utility originally proposed a 20.5% increase in December last year for the 2023 financial year, Cassim confirmed at the time.

Eskom proposed a 20.5% increase in order to address financial sustainability and liquidity challenges.

If the 20.5% increase was realised, R100 of electricity would have translated to only 30 units.

However, Mayor Hill-Lewis vehemently stated on multiple occasions that the proposed increase was far too much for Capetonians to afford.

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The City of Cape Town set up a petition following his remarks to challenge the proposed hike - which is closed at this time.

Hill-Lewis proposed at the time the justifiable increase in electricity tariffs would be in line with inflation.

On Thursday, despite the 9.61% increase instead of the 20.5% increase, Hill-Lewis believes it is still too high.

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“This increase is less than half of what Eskom asked for, and is a clear rebuke to Eskom’s totally unrealistic request,” he said.

“While I am happy that Nersa took the voice of thousands of Capetonians into consideration, it must be noted that the increase of 9.61% is still 4.1 percentage points higher than inflation.”

“The latest announcement by Nersa will not be welcomed by Eskom. However, passing the bill on to struggling consumers should not be the default solution, and Nersa should be lauded for taking a strong stance in this regard,” he added.

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A 544% increase to the average price of electricity was felt by South Africans pockets between 2007 and 2021, yet an increase in load shedding was still experienced - the worst load shedding occurred at the height of the Covid-19 pandemic in 2020 and 2021.

“Electricity tariff increases for City customers will be determined through the Budget process and increases will come into effect from 1 July 2022,” the mayor said.