Contrary to Brett Herron’s disingenuous letter of April 15, “LETTER: Cape Town’s fight to charge more for electricity”, the City is, in fact, fighting to provide more electricity, for less, than any other municipality.
Tariff setting makes provision for tariffs that cover the cost of providing the service so entities do not go bankrupt.
The City balances affordability for customers with the income required to cover the costs of service provision, without jeopardising service delivery. No profit is planned for on the sale of electricity.
The highest cost driver is Eskom’s tariff setting; the City spends about 67% of its electricity income to buy power from Eskom.
Two high court judgments have ruled the National Energy Result of SA’s methodology to be unlawful.
Nersa’s recommendation for 2023/24 would have resulted in the City’s energy service running a shortfall of more than R500 million, placing service delivery and the ending load-shedding programme at severe risk.
Unlike many failing municipalities elsewhere, the City is fighting to remain sustainable and keep the lights on.
We also provide the most inclusive qualifying criteria for Lifeline electricity consumers:
- Property value qualifying threshold: R500 000 (with no plans, as Good recently falsely claimed, to reduce it to R400 000).
- Monthly household income threshold: R7 500 for properties valued over R500 000.
- Pensioner and grant recipient criteria: under R22 000 monthly income.
- Subsidised units: 600, with a monthly average of 450 over 12 months to stay on Lifeline.
- Lifeline customers using more 600 units pay 44% less – R1.89 less per unit. Lifeline customers using up to 600 units a month pay R113.94 less compared to two years ago.
This is in stark contrast to the Good-run Theewaterskloof Local Municipality, where it cuts the number of cheaper electricity units the poor can buy from 350 to 250 units a month in 2023/24 (The cost of 250 units increased to R3.27 compared to R2.12 previously).
* Cllr Siseko Mbandezi, Mayco member for Finance, City of Cape Town.
** The views expressed here are not necessarily those of Independent Media.
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