Cape Town - Despite calls for the City to absorb the electricity tariff increase, it seems consumers will still feel the pinch following the tabling of the draft “Building Hope” budget.
Mayor Geordin Hill-Lewis tabled the budget for 2023/24 with the draft now open for public participation until May 5. The budget includes a record R10,9 billion infrastructure investment budget and a 17,6% electricity tariff hike compared to Eskom’s 18,49% increase.
According to Hill-Lewis this will offer “significantly more protection for lower income customers on the subsidised Lifeline tariff”.
“We fought against Eskom’s increase at every step of the way. I know how much people are struggling to make ends meet right now, and that Eskom’s spiralling electricity prices wreak havoc in household budgets.
“We have made changes to the tariff structure for residents who qualify for the subsidised Lifeline electricity tariff. Currently, customers consuming more than 350 units would pay R3,71.
Because of the Lifeline shift we are making today, those customers will now pay R1,84. We have also raised the property value criteria for Lifeline customers to R500 000 – up from R400 000 – to compensate for residents’ property value growth,” said Hill-Lewis.
However, civil activist group, Stop CoCT said while the Lifeline tariff is welcomed, the majority of consumers will still be affected by the hike.
“Stop CoCT has been pointing (to) the unfair tariffs for Lifeline users when they use more than 350 units for several years now. It is therefore welcomed that this was finally addressed by Council. For the rest of residents, not nearly enough was done by the City to alleviate the huge tariff increase approved by NERSA.
The Eskom increase is still applied by the City to more than 60% of the City’s costs directly related to Eskom.
The 60% bulk purchased from Eskom should be the only portion of City electricity costs affected by the Eskom tariff increase of 18.49%.
“The City is still adding a whopping 17.6% increase to costs such as salaries, maintenance and other overheads. The 17.6% is way above the current inflation rate of 6.9% which would be more justly applied to salaries and other overheads,” said Dickson.
Good Party’s finance councillor, Anton Louw, added: “A 17,6% price hike, along with the skyrocketing prices and overall high costs of living, is simply making life unaffordable for hard-pressed residents.
“And with inflation standing at 6,9%, this is a heavy increase on the average household. Municipalities must raise revenue in order to provide services, but the mark-ups must be fair, affordable and just.
This particularly applies to a relatively well-off City, with savings in the bank. Residents already pay a massive mark-up on electricity. As at the end of January 2023, the City had accumulated a surplus of R600 million over their projected revenue collection,” said Louw.
Further enquiries to the City had not been answered by deadline.
Cape Times