By Lee-Yandra Paulsen

In a recent development, the organization Stop COCT has joined the GOOD party by approaching the National Energy Regulator of South Africa (NERSA) to contest the City of Cape Town’s proposed electricity tariff increase. Stop COCT argued that the proposed increase exceeds the 15.1% limit approved by the regulatory authority.

Sandra Dixon, Founder of Stop COCT, discussed the matter in an interview with VOC Breakfast on Thursday. Dixon shed light on the issue and stated,

“The city received a 10% increase from Eskom for the electricity it purchases. This increase covers 60% of the City of Cape Town’s costs, while the remaining costs encompass salaries and overheads. Whenever citizens report a faulty streetlight or a power box failure, the expenses associated with these repairs are considered overheads. By imposing a 17.6% increase on the entire tariff, the city is implying that their salaries and overheads have also risen by the same percentage. This claim is untrue as these costs are typically tied to inflation, which is how Nersa arrived at the approved tariff increase of 15.1%.”

Dixon further highlighted the issue of service delivery costs.

“Service delivery expenses should largely be covered by the basic charge of R252 per month that almost everyone pays. Additionally, the city has introduced an additional charge of 37.57 cents per unit, justifying it as a fee for streetlights, while transferring the rest of the amount to the city’s rates account. It doesn’t make sense for us to pay for rates through our electricity bills. It appears that the city has overstepped its boundaries.”

Dixon stated while other municipalities have reduced their tariffs in accordance with NERSA guidelines, the City of Cape Town has refused to lower its tariff hike within the recommended limits. This lack of transparency is evident as the city did not disclose Nersa’s decision at the time; it was kept under wraps.

“The financial monitoring report for June reveals that the City of Cape Town earned a significant surplus from the sale of electricity. In fact, over the course of the financial year, the city amassed a surplus of approximately R1.6 billion from its overall operations. The city should, in theory, break even. However, the city currently holds a bank account balance of R18 billion, of which approximately R10 billion is allocated for operational costs, as mandated by municipal law. The remaining R8 billion continues to grow each year due to these surplus amounts,” commented Dixon.

The joint efforts of Stop COCT and the GOOD party aim to challenge the City of Cape Town’s proposed tariff increase and ensure that the Nersa guidelines are adhered to. The lack of transparency surrounding the city’s financial surplus, and the imposition of an excessive tariff increase has raised concerns among citizens. As the matter unfolds, it remains to be seen how NERSA will respond to Stop COCT’s plea and whether the City of Cape Town will reconsider its tariff hike considering the public outcry.

In a response to the GOOD party and Stop COCT’s challenge of the City of Cape Town’s proposed tariff increase. The City’s Mayoral Committee Member for Energy, Beverley van Reenen said that due to Eskom’s steep tariff hike of 18,5%, the city now has to pay 18,5% more for bulk power from Eskom to distribute to City customers. Van Reenen further stated that Nersa’s tariff guideline method was ruled unlawful in October 2022.

VOC