On Monday, 23 September 2024, the National Energy Regulator of South Africa (NERSA) published Eskom’s Multi-Year Price Determination (MYPD) 6 for the period between 2025/26 to 2027/28. The City has warned against Eskom’s plans to hike electricity tariffs by an outrageous almost 44% for municipalities and 36% for their direct customers. Sustained Eskom tariff hikes are leading to protests in Cape Town as residents and businesses struggle to make ends meet.
It is our expressed view that if Nersa grants Eskom such mammoth price hikes, it will not only worsen living conditions for most residents in our city, but it will also severely hurt small businesses.
Last month, the Executive Mayor Geordin Hill-Lewis wrote to Nersa, calling on the national energy regulator to reject Eskom’s proposed 44% hike. It is unthinkable that an increase of such a magnitude is even proposed.
The City is already bearing the brunt of Eskom’s rising tariffs. Some 75% of the City’s income received from electricity sales goes directly to Eskom. So any big Eskom increase has a profound impact on the City. In addition, the City has seen sporadic protests reported in areas such as Lavender Hill over Eskom-driven rising electricity prices. Some of these protests appear to be politically motivated with fake news doing the rounds, attributing high electricity costs to newly installed prepaid meters by the City.
What is actually hiding behind the protests and misinformation is that there have been City investigations into meter tampering, which is a way of stealing electricity.
All meters belong to the City and the law empowers the City to have reasonable access to its meters.
By far most of our customers in Lavender Hill and elsewhere in the city are not tampering or bypassing.
Prepaid electricity meters cannot increase electricity costs, they merely measure electricity consumption. Where tampered or defective meters have been replaced with new meters, customers will notice a change in their purchasing patterns as they will now be making payments toward their electricity consumption – so it will not be free as previously they used electricity without paying for it.
According to StatsSA’s Non-Financial Census data for municipalities, released in March 2024, Cape Town has SA’s highest proportion of residents benefitting from free basic water and electricity. To shield lower income households from Eskom increases, Cape Town has been offering the most substantial qualifying criteria for Lifeline electricity in South Africa.
Progressive Lifeline tariff benefits in a nutshell:
· The City implemented a big price reduction of 44% less, averaging use of 450 units per month – that’s R1,89 less per unit.
· No other city has reduced the price of electricity for indigent households over the last two years. The proposed Eskom increase makes this protection that the City has provided challenging.
· Last year, the City raised the number of units that could be bought by Lifeline customers on the cheaper tariff from 350 to 600 units a month.
· Remember, customers must stay on 450 units per month over 12 months.
· Lifeline customers using up to 600 units in a month, pay R113,94 less compared to two years ago
