Adiel Ismail writes that Why should electricity tariffs be based on the value of one’s property? Even if a household with municipal value exceeding R1 million uses less than 450 units a month, then the owner is still charged at the highest domestic rate. Is this fair? file picture: Leon knipe.
Residents are furious about the City of Cape Town’s 17.6% electricity tariff increase implemented on July 1, which is 2.5% higher than the National Energy Regulator of South Africa’s (Nersa) ceiling tariff increase of 15.1%.
The electricity tariff increase comprises a regulated increase component approved by Nersa, and an unregulated increase component not approved by Nersa The unregulated increase component is on average 10% of the value of the regulated tariff increase.
Nersa received numerous complaints, and subsequently approached the City for an explanation. Does it imply that the City did not get the approval from Nersa for the 17.6% increase, or for the unregulated portion added on to the increased tariff?
A household is charged one of three types of electricity tariffs by the City: a Lifeline Tariff for electricity usage less than 450 units a month, and if the value of the property is under R500 000; a Domestic Tariff if usage exceeds 450 units a month and the property value is less than R1 million; and a Home User Tariff if the value of the property exceeds R1 million, or a credit meter is installed.
Why should electricity tariffs be based on the value of one’s property? Even if a household with municipal value exceeding R1 million uses less than 450 units a month, then the owner is still charged at the highest domestic rate. Is this fair?
It should be noted that 60% of the monies collected for electricity from residents by the City goes towards paying Eskom, while 10% is transferred to the City’s municipal rates department.
Yet, shockingly, the remaining 40% that is not due to Eskom, was also increased by the City by 17.4%. The latter exorbitant increase is charged at a time when residents are already buckling under the spiralling cost of living.
The City also uses electricity pre-payment to recover any other arrears of residents which could be for water, rates, and any type of fines and penalties up to a maximum of 90% of the prepayment amount. Some of these households get 1 unit for R10. Is this fair?
Residents are fed up, and a protest is organised for August 9 at the Cape Town Civic Centre at 10am. Ensure you support this protest to show unity in our resolve to get the attention of the City's administration.
* Adiel Ismail, Mountview.
** The views expressed here are not necessarily those of Independent Media.
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