Electricity tariff hikes ‘unsustainable’

The recent electricity tariff hikes, approved by the National Energy Regulator of South Africa (Nersa), are a big headache for even the middle class. The regulator approved 178 tariff hike applications for the 2024/25 financial year. These were implemented from the 1^st of July 2024. Prepaid electricity consumers in Johannesburg are feeling the added pain of an additional fixed charge of R200 on their monthly electricity bill. 

In a statement, Nersa said it processed the 2024/25 distributors’ tariff applications in line with the provisions of the Electricity Regulation Act and also in compliance with the High Court order in the Nelson Mandela Chamber of Business.

Elitsha reported recently that residents of Buffalo City in the Eastern Cape protested against the tariff hikes.

The Soweto Electricity Crisis Committee (SECC) has been raising issues of electricity provision for a long time at public hearings with City Power, without success. But City Power and the City of Johannesburg don’t want to listen to the people said Zodwa Madiba of the SECC. They decide for themselves and implement, she told Elitsha: “They refused flat rate long time ago; they wouldn’t be in this situation if they listened to us. We can’t allow City Power to take a decision without consulting us or meet us on hearing as Nersa does for Eskom. They should hear why we don’t want the pre-paid meters.”

Talk of privatisation is uncalled for, said Madiba. “The only solution to this is renewable energy which is people’s power. We need a just transition to renewable energy and healthy electricity for our life.”

Madiba said because of the high rate of unemployment, those who are employed should pay according to what they can afford, with pensioners allowed to enjoy the peanuts they receive and high-end users taxed to subsidise the poor. And, nobody should have electricity cut at home as it is a basic need. 

Unions decry energy poverty

Opposed the planning electricity tariff hikes for 2025, the South African Federation of Trade Union (Saftu) issued a statement: “This series of increases has placed a significant financial burden on South African consumers particularly working class households who are already struggling with the economic burdens of unemployment and the rising cost of consumer goods.”

The proposed tariff increases by Eskom must be viewed in the context of long-term trends in electricity prices. According to Saftu, between 2007 and 2024, electricity prices in South Africa increased by more than 539% (nominal). 

“The current proposal, if implemented, will only continue this trend. Higher electricity costs will only make it harder for people to afford a living especially because it is a basic good required to heat homes, for cooking and heating water. The history of mismanagement, corruption and looting has sabotaged Eskom’s financial health, putting it in a condition where it perpetually seeks investments to stay afloat,” the statement reads. 

The federation said it wants Free Basic Electricity (FBE) for working class people. “FBE will not be achieved under market competition. This means even the dummy FBE that they claim to be giving to millions of households will be eradicated to make way for regulated provision of electricity,” said Saftu. 

City of Cape Town defends cruel tariff hikes

Zoleka Mngcwengi, from Delft, said she cannot afford electricity on the income she makes selling clothes or ‘anything’. “If I buy electricity for R10, I get only 4.6 units, but before, for the same amount I could get 5.7 units. If I buy electricity for R20 at 10 a.m. it’s finished, by the same time the following day.” Load shedding can make the hustle to buy electricity wasted, leaving you to hustle again for money to buy paraffin. “It is a daily struggle and our lives are being made difficult,” said Mngcwengi. 

The City of Cape Town has for years been under scrutiny for hiking electricity prices beyond Nersa recommendations. 

Joburg City Power justifies R200 surcharge 

City Power is alleged to be charging customers 26% more than the Eskom price. Spokesperson, Isaac Mangena told Elitsha that the R200 additional charge is to cover maintenance costs. “This measure ensures a fair distribution of the upkeep costs, helping to sustain reliable service amidst challenges like cable theft and illegal connections. By collecting this charge, City Power can invest in necessary repairs, upgrades, and security measures, ultimately benefiting customers through a more stable and dependable electricity supply,” said Mangena. 

Historically, prepaid customers did not contribute towards the cost of maintaining the network in their neighbourhoods that supplies their meter with electricity as they were only paying for the consumption. “By introducing the R200 per month service fee to pre-paid customers, this allows that all residents who rely on the network, pay for its maintenance and repairs. Indigent customers qualify for FBE and are not subject to new service and capacity charges,” said Mangena.  

He defended City Power’s application to hike charges as proportionate to the cost of living. “Our approved average tariff increase of 12.72% does not mean every customer will experience the same increase as we have started to implement some of the findings of the cost of supply study. As a result, some customers will experience a slightly lower tariff increase. For instance, the average increase to a typical indigent customer was limited to 6.21% as they are the most vulnerable customer category.