News / South Africa

Virginia Keppler
2 minute read
20 Oct 2017
5:15 am

City of Tshwane rejects Eskom’s hike plea

Virginia Keppler

The city says the increase is exorbitant and would place an undue burden on the city and its residents.

The City of Tshwane, through the South African Local Government Association (Salga), has rejected Eskom’s draft revenue application submitted to the National Energy Regular of South Africa (Nersa) for a 19.9% electricity tariff hike for the 2018- 19 year.

Tshwane MMC for utility services Darryl Moss said this was as the city and the people of Tshwane cannot afford such an increase.

He said this would effectively translate to a 27% increase this year. He said it was exorbitant and placed an undue burden on the city and its residents.

Other municipalities also made their submissions to Salga rejecting the increase. Moss said electricity sales in municipalities show a sustained downward trend in recent 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 nonpayment, 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,” Moss said.

He said the application was rejected on the basis of nonaffordability. Over half of the tariff increase is based on sales forecasts, but Eskom has acknowledged that sales are dropping, as is the case throughout the industry, including municipalities.

Moss suggested that a properly structured plan to phase in increases should be developed to avoid exorbitant increases in just one year.

During his budget speech in May his year, executive Tshwane Mayor Solly Msimanga said his administration was committed to ensure that it becomes less expensive to live in the capital.

Nhlanhla Ngidi, Salga electricity and energy head, said all municipalities countrywide have made submissions rejecting Eskom’s draft revenue application submitted to Nersa.

He said Nersa would hold public hearings in all nine provinces where the public could make submissions on whether they reject or support Eskom’s application.

“The public hearings commence on October 30 in Cape Town.

“We, as Salga, will represent the municipalities at these hearings and continue with the rejection of the application for the tariff hike,” Ngidi said.

According to Ngidi, Nersa should make a decision based on the outcomes of the hearings by the beginning of December.

Written comments can be forwarded to mypd@nersa.org.za or hand-delivered to 526 Madiba Street, Arcadia, Pretoria, or posted to PO Box 40343, Arcadia, 0083, Pretoria, South Africa. – news@citizen.co.za