Cape Town mayor urges Nersa to ‘reject Eskom’s 44% tariff hike’

Cape Town mayor Geordin Hill-Lewis has written to the National Energy Regulator (Nersa), calling for the rejection of Eskom’s planned tariff hike.

Hill-Lewis said the power utility had not formally submitted its application but said “early consultations have revealed their intention to ask Nersa for a 44% hike for electricity sales to municipalities, and a 36% hike for direct Eskom customers”.

In the letter sent to Nersa this week, Hill-Lewis said the city is strongly opposed to “Eskom’s 44% hike”.

“This is a mammoth Eskom increase that Nersa must stop in its tracks. It is unthinkable. On behalf of Cape Town households and businesses, especially small businesses, we are calling for the rejection of a 44% electricity tariff hike. The economic impact, especially on lower-income families, will be immense with the cost of living already being so high,” said Hill-Lewis.

He said the city was concerned that the proposed increase would force consumers to pay for the “parastatal’s poor operational choices, including the legacy of mismanagement and corruption”.

“We are calling on Nersa to marshal the independent expertise needed to assess Eskom’s cost structures and margins. We believe that Eskom can improve its efficiency, reduce costs and develop new revenue streams rather than passing this huge increase on to consumers.”

Cape Town plans to buy power from the open market to lessen Eskom’s burden. The city is investing R4bn in electricity grid upgrades over the next three years, he said.

“Cape Town is one of a handful of municipalities that bases our own tariff requests to Nersa on detailed cost-of-supply studies, and we are glad to see the courts affirming this method as correct and lawful. We know the fine detail of what it costs to operate a future-focused, well-run electricity service.

“Buying power from Eskom accounts for 70% of our costs, and there is no way we can absorb a huge 44% increase while still hoping to offer a working electricity service to Capetonians. We also know that households, businesses and our economy can’t afford 44%, so the best approach is to stop this Eskom madness before it becomes reality.”

TimesLIVE