Electricity tariff hike adds to Covid cost-of-living pain

Civics says the City’s latest budget, including a 13.5% electricity tariff hike, does not take into account the financial difficulties faced by many as a result of the financial impact of the Covid-19 pandemic.

Capetonians suffering from job losses and salary cuts because of lockdowns brought on by the Covid-19 pandemic will need to dig deeper into their pockets following the City’s 13.5% electricity-tariff hike, which kicked in on July 1.

Ratepayers will see a 4.5% average increase for rates, 5% increase in water and sanitation, 3.5% for refuse removal, but the 13.5% electricity tariff increase seems to be the sticking point for many.

Civics say the City’s new budget increases will further cripple households and businesses who are struggling to make ends meet.

In a statement on Friday July 2, mayoral committee member for finance Ian Nielson blamed the higher power tariffs on the 17.8% increase Eskom slapped on the electricity it supplies to municipalities.

“Because the City manages its distribution network effectively, we are able to bring our tariff increases in lower than the Eskom charges,” he said.

He said 65% of the City’s electricity tariff was used to buy bulk power from Eskom.

According to Mr Nielson, residents can apply for indigent rates relief if they earn between R4501 and R7500 a month.

If your property has a municipal value of less than R300 000, you automatically qualify for the indigent package and will not pay rates after being granted indigent rates relief.

Pensioners and persons with disabilities also qualify for rebates, and households with an income under R4000 will receive some free services, such as water or refuse removal.

Belinda Stark, of Ysterplaat, worked in the hospitality industry in Cape Town’s CBD for 13 years until the country went into level-5 lockdown last March. She lost her job and she and her two children are living off her mother’s pension. She is applying for a child support grant for her youngest son.

“I think it’s impossible and quite ridiculous that we are paying so much money for electricity, we could not afford the old tariff and definitely not the new increase,” she said.

Brooklyn, Ysterplaat and Rugby Residents’ Association deputy chairman Justin Kumlehn said the increase was going to hurt lower-to-middle-income residents already reeling reeling from the financial impact of the pandemic.

A lot of Booklyn, Ysterplaat and Rugby residents would qualify for the indigent rates because so many of them had lost their jobs, he said.

Bothasig Ratepayers’ Association chairman Derek Serra said: “The City should have left the rates as they were because residents were already suffering with the previous rates.”

Table View Ratepayers’ Association chairwoman Mandy da Matta said they did not support the 13.5% electricity-tariff hike.

“The country’s economy has not grown, and due to the Covid-19 pandemic, most residents are under severe financial pressure. Does the City of Cape Town have sufficient reserves to absorb the increase in electricity tariff, and is it necessary to take 30% profit on the rate charged by Eskom to the City?”

Many families had seen their standard of living drop, she said.

“Although we grasp the need of the City to generate income, under the current economic climate, it is expected of the City of Cape Town council to think outside the box to secure funding. The number of households that are able to afford tariff increases has decreased by approximately 30%,” she said.

Milnerton Ratepayers’ Association chairman Bouwe van der Eems said: “It has not been taken into account that thousands of businesses closed down and millions of citizens lost their jobs. To add insult to injury, the City of Cape Town decided to burden it’s decimated tax base with a conservative rate increase at the same time as we were experiencing a pandemic.”

Sandra Dickson, from Stop City of Cape Town (COCT), said the budget appeared to give little thought to the plight of ratepayers.

“A burning question is why the fixed electricity levy was also increased by the same 13.5% as the consumption-based tariff. Does the City’s fixed- maintenance costs really exceed current inflation by almost 4 times? This is concerning.”

Mr Neilson, however, encouraged residents who qualify for a rebate to apply for one, by visiting any City cash office or by applying on the City’s website.

To apply you will need proof of identification, three months’ bank statements or a sworn affidavit stating that you do not have a bank account and a bond statement for the last three months.