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City of Cape Town tells Nersa to reject Eskom price hike and says it is unaffordable

Mayor Geordin Hill-Lewis said that Capetonians simply cannot afford the increases, and called them ’unfair, unaffordable and unjust’. Picture: Leon Lestrade/African News Agency/ANA.

Mayor Geordin Hill-Lewis said that Capetonians simply cannot afford the increases, and called them ’unfair, unaffordable and unjust’. Picture: Leon Lestrade/African News Agency/ANA.

Published Jan 18, 2022

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Cape Town - Mayor Geordin Hill-Lewis has called on the National Energy Regulator of SA (Nersa) to reject Eskom’s application to increase the price of electricity by 20.5% in the 2022/3 financial year.

He said the power utility’s proposed increase was "unfair, unaffordable and unjust" – and too costly for Capetonians.

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In June last year, Eskom submitted its fifth Multi-Year Price Determination (MYPD5) application, asking to be allowed an amount of R279bn, R335bn and R365bn for financial years 2022/23, 2023/24 and 2024/25, respectively.

In December, Nersa published a consultation paper and Eskom’s MYPD5 application, and invited the public and other stakeholders to attend virtual public hearings on the matter, which began yesterday.

In an oral submission, Hill-Lewis said: “Capetonians simply cannot afford these increases. They are unfair, unaffordable and unjust.”

Like the majority of South Africans, many Capetonians were struggling to make ends meet, and blamed the pandemic and subsequent lockdowns for job losses leading to this situation.

“The price of electricity has risen by 307% over the past 13 years, far exceeding inflation.”

Instead of Eskom’s increase, the City offered an alternative that would bring the increase in line with the Consumer Price Index (CPI) of 5.5%.

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At the same time, the City has started a petition that allows Capetonians to add their voices to the call on Nersa to reject Eskom’s application.

Hill-Lewis said that by Monday, the petition had been running for 48 hours and was supported by 30 000 residents. The petition is available on the City’s website.

Stellenbosch mayor Gesie van Deventer delivered a similar message to Nersa.

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She described the proposed increase as “an extreme injustice” and said citizens were being forced to pay to fix the mess Eskom had created.

Mitchells Plain-based Southern African Faith Communities Environment Institute (Safcei) activist Lydia Petersen said many households in Cape Town received social grants, and unemployment was rife.

“A social grant cannot feed an entire family with little or no money left for electricity; and, in some homes, electricity is deemed a luxury to have.”

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She said because the municipality has strict qualifying criteria, such households do not receive free basic electricity and have been forced into acts of criminality, such as illegal connections, in order to survive.

Eskom chief financial officer Calib Cassim said the power utility is making every effort to find further efficiencies within its business, but certain elements beyond their direct control – including independent power producers (IPPs) and carbon tax legislation – were applying upward pressure on the tariffs.

Away from the public hearing, Local Government MEC Anton Bredell urged all municipalities in the province to add their voices to objecting to Eskom’s application for an increase.

Bredell said: “In the Western Cape we have a good working relationship with Eskom, but in this case, we have to say, with great conviction, that the proposed increase cannot be supported.”

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Cape Argus

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