Buffalo City residents protest against electricity price hikes

Buffalo City residents have urged the municipality to reconsider its controversial new prepaid electricity fixed charge. On Wednesday, the residents protested outside the office of Mayor Princess Faku, calling on her to immediately halt the charges.

The protest was provoked by the National Energy Regulator of South Africa’s (Nersa) approval of a 12.07% annual electricity price hike, and the metro’s introduction of a monthly fee of between R370 and R660 for households on prepaid and post-paid meters for infrastructure maintenance.

The angry residents shouted outside the office, calling on the mayor to come out and address them but she refused to. While their representative from National Community Dialogue, Leonard Ncumbese, and a few others were locked in a meeting with the mayor, one resident shouted, “The mayor has called the meeting, she did not call certain individuals. The people who elected her from ward one to fifty are here and angry, she must come out! There are police here – how are we going to harm the mayor?”

Speaking on the sidelines, Sinethemba Memani said, “The municipality is killing us because the majority of people are unemployed and there is no money to buy electricity. There is also a challenge of informal electricity and illegal connections which affects those who are purchasing electricity – the municipality must be considerate.”

Another resident said although they have come up with ways to save electricity, they are still struggling. “At my household we have two gas tanks, 9kg and 5kg. We only use electricity for refrigerator, lights and ironing. With R300 plus free prepaid, it’s like we have done nothing, we are still struggling. We urge Mayor Princess Faku to hear the voices of the residents of Buffalo City and respond with urgency to address this matter,” said Nosisa Mdunguza.

The residents were also angry that in April, Princess Faku was granted a court interdict to prevent them from protesting. “We are tired and angry at what Faku is doing to us. She said she wanted to talk, now let us talk. In April when we wanted to talk to her about debt write-off, incorrect billing, illegal connections, she ran to court,” said Mdunguza. Before the protest, residents represented by Ncumbese had written to the mayor, requesting the Buffalo City Council to delay the tariffs and charges and to open up a process of constructive multi-stakeholder engagement on the issue.

Buffalo City Metropolitan Municipality (BCMM) spokesperson Samkelo Ngwenya said: “Buffalo City Metro is one of the municipalities that submitted a tariff increase application to Nersa, accompanied by a completed cost of supply [COS] study. Municipalities are not in the business of making profits, hence all increments are driven by the cost that the metro spends to supply electricity affordably.

“The completed COS study, which was funded by national treasury, indicated that overall, electricity tariffs were under cost reflective by some -16.9%. Meaning the municipality has been incurring losses to the amount of over R300-million and these are from technical losses. To achieve full cost reflectivity in one financial year, the metro understood that this would be too much of a financial burden for the BCMM customers. This is one of the reasons why the metro offered a three-month amnesty to consumers who bypassed our water and electricity metering structures,” Ngwenya said.

In March the metro announced an amnesty period of three months for residents who have self-connected to water and electricity to come forward and have their boxes fixed at no cost to themselves, as well as not face any penalties over the tampering. The amnesty ended in June. From now on, those caught tampering with their meters face a hefty penalty of a R15,000 or four months in jail.

Ngwenya said things could have been worse, Nersa having negotiated reduced rates with the metro to reduce the electricity increase costs to some customer categories. “These categories were the prepayment metered domestic customer and domestic indigent customer, where the impact of the electricity tariff increase is estimated at 4.76% and 5.16% respectively.  In fact, this 5.16% tariff increase accounts for 92% of all BCMM customers.”

Ngwenya said the municipality agreed with Nersa that implementing the increase in one calendar year would be too much for customers. “BCM required a 16.9% increase to collect R3.353-billion. However, the energy regulator brought down our proposed income to R3.179-billion [less R173m] which equates overall to an 11.72% increase across all tariffs in our revised 2024/25 submission.”

Ngwenya said the municipal tariff structure allows customers to apply to change to more affordable prepayment options and migrate to indigent scales. “BCMM will endeavour to uplift these disadvantaged customers as this is our social responsibility. In fact, through the new tariffs, the metro is subsidising 61 percent of the indigent bracket.”

Council recently wrote off water balances worth millions for indigent debtors. This shows the commitment to ensure that the metro governs a pro-poor municipality whilst balancing the quality of services that are affordable, said Ngwenya. He said electricity tariffs have, unfortunately, had to go up for the 2024/25 financial period and this is the case across the country and not only in BCM. Without the increase, the municipality would be supplying and selling electricity that it cannot afford.