Faced with a likelihood of electricity tariff increases, civic organisations and opposition politicians have called on Cape Town Mayor Geordin Hill-Lewis to put his money where his mouth is.
Hill-Lewis described the 18.6% Nersa-approved Eskom electricity price hike as "unfair, unaffordable and unjust".
But the City has been criticised for adding a surcharge to its electricity tariff, making households using more than 600/kwH per month pay more than double the Nersa-regulated tariff.
GOOD party secretary-general Brett Herron said while municipalities must raise revenue in order to operate essential basic services, with many citizens battling to feed their families, let alone pay for electricity -- the "mark-ups" must be fair, affordable and just.
“Now is the time for mayors and councillors across the country to show leadership and ingenuity, dig deep into their budgets, weed out historical but non-essential allocation, and give the people a break.
"A 0% mark-up in the next financial year will still leave municipalities with surplus revenue,“ he said.
For the 2022/23 financial year the City budgeted for a surplus of R1.78 billion from the sale of electricity through adding the surcharge of 31 cents per kWh .
The City also charges residents between 298.30c kWh and 362.72c kWh.
Herron said the City, however, was not the only municipality that implemented a "mark-up" in its electricity tarrifs.
"In Johannesburg, households are charged between 209.73c kWh and 274.11c kWh, depending on the amount of electricity they consume.
"eThekwini currently charges residential consumers 257.89c kWh," he added.
Nersa has yet to make a decision on an allowable tariff for municipalities.
Spokesperson Charles Hlebela said the energy regulator would consider corresponding municipal tariff increases for the 2023/24 financial year once it had considered Eskom's retail tariff structural adjustment and all related court judgements.
Municipalities are expected to implement tariff increases from 1 July.
Activist group, STOP CoCT also called on the City to look at ways to lessen the financial burden on residents.
The group proposed measures such as increasing the lifeline tariff from 350 units to at least 450.
Currently domestic and home user blocks are charged higher if they consume more than 600 kWh and STOP CoCT suggested that the treshhold should be raised to 800 units.
Spokesperson Sandra Dickson added that the City should also consider scrapping the home user block which attracted a fixed charge of R194.
"This fixed charge is artificial. Also, the bulk electricity purchase by the City from Eskom makes up around 60% of their costs. The tariff increase should therefore be applied to that 60% and the remaining 40% could be increased at most by the Consumer Price Index (CPI) rate,“ she said.
Head of the energy transition programme at the Public Affairs Research Institute, Dr Tracy Ledger, said municipalities were limited by regulation in terms of what they could and could not do in respect of tariffs.
Ledger said while research has shown that many households were sacrificing money for food to pay for electricity, and a big increase in electricity prices would make hunger and child malnutrition even worse, it was almost impossible for a municipality not to increase their own tariffs.
"Electricity revenue is the most important source of income for municipalities,“ she said.
Ledger added that better subsidies were required from the national government to protect poor households from price hikes.
"We have a free basic services policy, but it is very poorly implemented. It is meant to provide support to almost 11 million households, but only actually benefits about 2.5m because of poor oversight.
“Poor households are losing out on about R30 billion each year of services subsidies. We urgently need to reverse this situation so that people actually receive this benefit. Over time we need to increase the amount of free services that people get, particularly electricity."
Mayco member for Energy, Beverley van Reenen, said about 70% of the City's tariff income was used to buy electricity from Eskom.
Van Reenen said in the past the City absorbed the tariff increase but was now at the "tipping point ... not being able to further absorb increases".
"All income goes towards covering the cost of providing the service. Even so, costs are not fully recovered," she said.
Mayco member for Finance, Siseko Mbandezi, said the City's practice of deducting a certain portion of money from electricity purchased to offset municipal arrears was to ensure that it continued to deliver services.
"Many other municipalities simply disconnect customers for non-payment. Deducting amounts from prepaid purchases for municipal debt ensures that the customer still continues to have supply."
Mbandezi added that the debt management practice was not illegal and customers were made aware of it.
Weekend Argus