City of Cape Town to oppose 44% tariff hike at NERSA public hearings
City of Cape Town to oppose 44% tariff hike at NERSA public hearings! The City of Cape Town has announced its firm opposition to Eskom‘s proposed 44% electricity tariff increase for the 2025/26 financial year.
City officials, led by Mayoral Committee Member for Energy Xanthea Limberg, will represent residents’ concerns at Monday’s public hearings by the National Energy Regulator of South Africa (NERSA).
NERSA Public Hearings Kick Off in Cape Town
NERSA’s nationwide public hearings begin in Cape Town, where Eskom’s sixth multi-year revenue application is under review.
Eskom is requesting a significant increase in electricity tariffs, a move that has sparked widespread criticism from municipal leaders, businesses, and ordinary South Africans.
The City of Cape Town argues that such an increase would have dire consequences for residents already struggling with economic pressures.
City of Cape Town’s Position on the Tariff Increase
Xanthea Limberg has voiced strong opposition to the proposed hike, describing it as unaffordable and unfair.
“It’s unaffordable, unfair, and disconnected from the financial reality that households, businesses, and our economy face. The ripple effect is profound, as approximately 75% of electricity tariff income is used to buy power from Eskom for distribution,” Limberg said.
The City believes the tariff increase would disproportionately affect residents, especially vulnerable households and small businesses, further straining their finances.
Impact on Cape Town Residents and Businesses
Cape Town already grapples with the challenges of load shedding, unreliable power supply, and the rising cost of living. A 44% hike in electricity tariffs would exacerbate these issues, making basic services even less affordable.
Municipal officials are concerned that such a steep increase would undermine service delivery and social assistance programs, which are critical for the city’s indigent households.
Cape Town’s Support for Vulnerable Residents
The City of Cape Town has taken proactive measures to support low-income households and offset rising electricity costs:
- Free Basic Services: Stats SA reports that Cape Town has the highest proportion of residents benefiting from free basic water and electricity.
- Lifeline Tariff Improvements: The city has raised the number of subsidized electricity units for lifeline customers from 350 to 600 units per month.
- Cost Reductions for Indigent Households: Over the past two years, the City has reduced the cost of electricity for indigent households by more than 40%.
These efforts aim to cushion the most vulnerable residents from the financial burden of rising utility costs.
Wider Economic Implications
The City has also highlighted the potential knock-on effects of the proposed tariff hike on the local economy. Businesses, particularly small and medium enterprises, could face increased operational costs, leading to higher consumer prices and job losses.
Limberg stressed that Eskom’s proposal poses a major threat to municipalities’ ability to provide essential services, maintain infrastructure, and support economic growth.
Eskom’s Justification for the Tariff Hike
Eskom argues that the requested 44% tariff increase is necessary to cover its operating costs and recover from financial losses. However, critics, including the City of Cape Town, question the utility’s financial management and the fairness of passing its inefficiencies onto consumers.
The proposed hike comes on the heels of previous steep increases, further fueling public frustration with the state-owned utility.
Cape Town’s Vision for Energy Independence
Cape Town has been a vocal advocate for reducing reliance on Eskom by exploring alternative energy solutions. The city is investing in renewable energy projects and encouraging the use of independent power producers (IPPs) to improve energy security and affordability.
Limberg reaffirmed the city’s commitment to safeguarding residents from exorbitant electricity costs while advancing energy sustainability.
Conclusion: A Critical Moment for Energy Policy
The outcome of NERSA’s public hearings will have significant implications for South Africa’s energy landscape. As Cape Town leads the opposition against Eskom’s tariff hike, it sets the stage for a broader debate on energy affordability, efficiency, and governance in the country.
With municipalities, businesses, and civil society joining the conversation, the pressure is on NERSA to find a balanced solution that addresses Eskom’s financial needs without overburdening South Africans.
