Fury over the steep electricity hike boils over

As the uproar over the hike in electricity tariffs deepens, a dispute between the City and the energy regulator remains unresolved.

Thousands of customers in the metro have been flooding social media platforms with complaints over the 17.6% electricity increase which came into effect on 1 July.

Now they plan to take their frustration to the doorstep of the City's headquarters at the Civic Centre.

In the 2022/23  financial year the City's electricity increase of 9.6% was considered by the National Energy Regulator of South Africa (NERSA) as “unlawful” as it was not approved and was above the guideline increase of 7.47 %.

For the 2023/24 financial year, the City applied for a tariff increase of 17.6%, but based on NERSA's calculations which took into account the fact that the City implemented a 9.6 % increase in 2022, the actual electricity hike would be 19.7%.

Other metros hiked their electricity tariffs within NERSA's guideline of 15.1%.

The City of Johannesburg charged a 14.97 % increase in 2023/24, Tshwane 15 %,  eThekwini 15 %, Ekurhuleni's 14.98% and Buffalo City 15.1 %.

Spokesperson for the civic group, STOP COCT, Sandra Dickson said the increase of 18.6 % in the fixed charge also infuriated residents.

“The City has always maintained that this fixed charge is to cover non-consumption related costs, including their overheads. Now some customers whose properties are valued above R1 million now pay this extra charge of R252.09,” she said.

Dickson also said  the City continued to charge domestic users an unregulated portion of about 37 cents.

“If the City stopped this practice, all consumers would save a bit per unit both on electricity costs."

A Portlands resident who runs an Early Childhood Centre, Sakeena Moyce, had to shut down her centre for seven months when Covid-19 hit.

A few months later she was hit with a bill of R9 000 from the municipality for water services.

“We tried to make settlement arrangements but were told to pay the full amount. We made a loan and paid just enough to stave off the water supply cut.”

“The bill kept going up and is now around R37 000. The municipality then started deducting money from our electricity purchases from 2021.

“On Monday this week I bought R20 worth of electricity and only got 2 units.

“On 14 August the water supply was cut. It's tough times and with the intervention of the co-ordinator of the  #ElectricityTariffs Must Fall, Natasha Gertse the issues seems to have been resolved".

“On 17 August I bought R50 worth of electricity. I received about 14 units. We were so thrilled - for the first time since 2021 we got a bit more,“ said Moyce.

Gertse said the deductions from electricity purchases coupled with the high tariff plunged residents deeper into debt.

“What we want from the municipality is to acknowledge the financial situation of the consumers,” said Gertse.

In 2022 NERSA was served with court papers wherein the City sought an order reviewing and setting aside the regulator's decision to approve a 7.47% tariff increase to be in line with its 9.6% hike.

The City also sought mediation of the matter on the grounds that it was not given written justification for NERSA's disapproval of its application.

The City also proposed during the mediation, that it would reduce its tariff by 2.13% for 15 days - between 15 and 30 June 2023 should a court order be granted on 15 June.

It further proposed that if it could implement the clawback by 30 June, it would instead credit its customers by the same amount for the reduction period.

In its response NERSA maintained that the City's 9.6% increase was unlawful and its willingness to charge 7.4% for the 15 day period, indicated that it could have implemented the 7.4 % instead of the unapproved 9.6% from 1 July 2022.

On 13 June 2022 the Gauteng High Court in Pretoria ordered that the matter be removed from the urgent roll with costs which included costs of two counsels, refused to grant the City the relief it sought and ordered.

The matter was still believed to be before the court.

For the 2023/24 application to NERSA, the City cited loss of volume sales for its increase, caused by load shedding and  a shift by some customers to alternative energy sources.

However NERSA said it was unreasonable for the City to fund losses incurred due to load shedding through the tariff.

“This loss in sales is outside the customers' control and is not of their making. Instead of using the tariff to close the gap of declining sales, the City is to adjust its variable costs to align with declining sales.

“The City's bulk purchases will also naturally decrease because they are buying less volumes. The City cannot claim revenue for reduced energy sales by virtue of energy efficiency measures,” noted NERSA.

It further noted that customers who had energy self-generation facilities also paid connection costs to the grid.

NERSA also pointed out that the Electricity Regulation Act prohibited the charging of electricity tariffs by a licensee save for that which  has been approved by NERSA.

The City said tariff matters were under review and its hike was  “driven by Eskom's 18.5% hike”.

“At Nersa’s current recommendation of 15,1%, the City’s energy service would run a shortfall of more than R500 million,” it said.

NERSA previously told the City that it was "unreasonable“ to fund losses incurred due to load shedding through the tariff.

The energy regulator did not respond to questions sent by the time of going to print.