Ethekwini wants 22% electricity tariff hike

Ethekwini residents should brace themselves for high electricity bills this winter as the municipality plans a 21.91% electricity tariff increase from July.

Mayor Mxolisi Kaunda has tabled the metro’s 2023/24 budget and proposed a 21.91% electricity tariff hike for businesses and households.

Kaunda said the increase was subject to the National Energy Regulator of SA’s (Nersa’s) approval and open for public comment. The report will be back in council at the end of May for final approval.

The proposed increase is higher than Eskom’s municipal increase of 18.49% and high when compared to other metros such as Cape Town. This would be a huge jump from the 8.61% increase in the past financial year.

“The economic climate has made above inflation tariff increases inevitable. The three biggest contributors to the increases are out of our hands, that is, the Eskom increase, Umgeni Water Board increase and salary increases,” Kaunda said.

Electricity-related projects and services accounted for R19.6bn of the R57.9bn operating budget.

DA eThekwini caucus leader Thabani Mthethwa said the party would fight the increase. “The increase is too much, the residents of eThekwini are not even receiving the service of a disrupted electricity supply. The people of eThekwini cannot be expected to fund Eskom and the municipality where there have been allegations of maladministration of funds.”

Mthethwa said the DA had expressed its displeasure but wanted to challenge the increase through the public comment process and not halt the budget by fighting it in council.

“The budget will be tabled in council at the end of May for final approval; we will propose changes because we want a fair budget. The increase is too much.”

Meanwhile, the City of Cape Town cannot absorb much of the “high” Eskom price increase and intends to increase tariffs by 17.6%.

The municipality tabled its 2023/24 budget last week. It is open for comment by business owners and residents serviced by the municipality.

Mayor Geordin Hill-Lewis tabled what he described as Cape Town’s “Building Hope” budget, highlighting there were disappointments, including higher electricity prices for ratepayers.

The municipality absorbed a small margin of 0.89% from Eskom’s 18.49% increase.

“What hurts me, and I know it hurts every Capetonian, is the huge 18.49% Eskom tariff hike for municipalities. We fought Eskom’s increase every step of the way because it cannot be the job of the city, or its residents, to keep on subsidising Eskom’s increases.

“I know how much people are struggling to make ends meet and Eskom’s spiralling electricity prices wreak havoc in household budgets,” Hill-Lewis said.

The municipality was funding projects to end reliance on Eskom and is exploring the private sector market in its power plans.

He announced last Thursday that the municipality would issue a 500MW energy tender to alleviate load-shedding.

“Cape Town’s biggest power purchase tender — of 500MW — will be issued for competitive proposals on April 6. We encourage the market to take note and participate.”

Cape Town is not the only DA-governed municipality that has explored private sector markets for electricity supply.

In 2022, Tshwane was in the spotlight after it received an unsolicited bid offer from an Australian company, Kratos Energy, that submitted a proposal to refurbish, finance, operate and maintain the Pretoria West and Rooiwal power stations for 30 years.

The bid was put on ice after former Tshwane mayor Randall Williams was accused of putting pressure on officials to push it through. He was later cleared by a coalition government investigation.

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