DA must put its Cape Town money where its mouth is on electricity price hikes
19 September 2024
The GOOD party agrees with its Government of National Unity partner, the DA, that the proposed national electricity tariff increase of 36% on top of a 4% recovery charge is unaffordable and should be resisted.
But it smacks of opportunism and hypocrisy for the DA to campaign against national tariff hikes at the same time as it is fighting in the High Court for the right to implement higher tariff increases than those set by the regulator - as it has done in DA-led Cape Town for the past two years.
In the 2022/23 financial year the regulator (Nersa) approved a 7.4% tariff increase, but Cape Town implemented a 9.6% increase. In the 2023/24 financial year, Nersa approved a 15.1% increase, but the City implemented a 17.6% tariff hike on top of its hiked price from the previous year.
By the GOOD Party’s calculation, Cape Town’s over-charges have forced residents to cough up at least R660m extra over the past two years.
If the DA loses against Nersa in the High Court, the City will have to refund this money to residents – who are also, incidentally, funding the litigation arguing for the City’s right to charge them extra. This is more-or-less equivalent to motorists funding a court action demanding the right to pay more for petrol.
Instead of waiting for the court’s decision, the City would demonstrate that it is genuinely concerned about residents’ plight by pulling the plug on the litigation and refunding its over-charges now. It has the cash reserves to do so, and it would give long-suffering residents an immediate break.
Given the economic constraints in the country, and the levels of unemployment and poverty, citizens – including those in Cape Town – should not be charged a cent more than is necessary for electricity.
The municipal funding model allowing for municipalities to generate profit from marking up and re-selling electricity they buy in bulk from Eskom must be re-thought. If municipalities can charge whatever they wish for electricity, more and more South Africans will return to living in the dark. Instead of moving forward, the developing state will be reversing back to the era of electricity apartheid.
Nersa must consider staggering its tariff increases over several years, thereby reducing the shock of this year’s tariff hike.
Issued by Brett Herron, GOOD Secretary General & Member of the Western Cape Parliament. 19 September 2024
