The City of Tshwane, through the South African Local Government Association (SALGA), has rejected Eskom’s draft revenue application submitted to the National Energy Regulator of South Africa (NERSA) for a 19.9% tariff hike.
This is on the basis that the City and the people of Tshwane can ill-afford such an increase which would effectively translate to a 27% increase for the city and its residents.
This follows submissions made by the City of Tshwane and other municipalities to SALGA.
Electricity sales in municipalities show a sustained downward trend over the last years and in some cases have dropped significantly. Today the sale of electricity is at record low levels for all municipalities.
The 19.9% tariff hike would put great strain on the City of Tshwane as we already grapple with issues of non-payment, low revenue collections and theft.
The fact is that every electricity hike costs the municipality more to cross-subsidise the poor. We cannot bear any increase that is higher than inflation as this will put further strain on the poorer people in our communities.
Specifically our collective objections include but are not limited to the following:
- This application is rejected on the basis of non-affordability for the City and broader Tshwane citizens;
- There is more room for reducing inefficiencies at Eskom,
- The Independent Power Producer forecasting in the proposal is unrealistic and projecting on projects that have not come online;
- Over half of the tariff increase is based on sales forecasts but Eskom has acknowledged that the sales are dropping, as is the case throughout the industry including municipalities; and
- A properly structured plan to phase in increases should be developed to avoid an exorbitant increase in just one year.
While the Eskom tariff application advances reasons for the price increases (justified or not), we reject the 19.9% increase on the basis that it is exorbitant and places an undue burden on the City and its residents who are our primary concern.
The DA-led multi-party administration is committed to ensuring that we provide sustainable and affordable electricity to our people in our efforts to ensure an inclusive and caring Tshwane of opportunity.