How City of Cape Town plans to protect residents from Nersa tariff hike

John Maytham interviews Geordin Hill-Lewis, Mayor of Cape Town.

Following the approval of a tariff increase from Nersa, Eskom is now able to increase their electricity cost to 18.65% from April 2023.

RELATED: 'This thing makes me mad': South Africans react to Eskom tariff hike

About 15% of customers in the Cape Town metro are still on Eskom's grid and will be affected by the tariff hike.

Cape Town Mayor, Geordin Hill-Lewis shares more on what this means for the city of Cape Town and its residents:

• When the City finalises their budget, that tariff will also need to be approved by Nersa

• The municipalities electricity department spends shy of R1 billion a month with Eskom, and they too will have to pay according to the increase as they're a customer of Eskom

• Because of the municipality electricity department's commitments, they will be passing the increase to consumers

When you're dealing with a billion rand a month and a 18% increase, it's R180 billion a month; now that's not possible for a municipality, any municipality in South Africa to absorb on its own.

Geordin Hill-Lewis, Mayor of Cape Town

• Historically, the municipality's tariffs have been one decimal more or less than Eskom's, but Lewis-Hill assures that it hasn't been significant

• This is the result of additional costs that the municipality has to fund, which Eskom does not cover, such as streetlights and cable theft in order to meet their service standards. All of these factors need to be accounted for in their costs

Sometimes there is a difference of a few decimals, but usually that difference is not very significant.

Geordin Hill-Lewis, Mayor of Cape Town

• The municipality's electricity department's budget is close to completion, but has to be altered based on the recent 18.65% increase – the City budgeted for a 15% increase

This is actually more than our worst fear.

Geordin Hill-Lewis, Mayor of Cape Town

When asked by Maytham if he could give a commitment that the municipality's increase will not exceed Eskom's he said that he was unable to.

He will need to look in detail at their cost structure and services that they have to cover, including the upgrading of infrastructure.

There are additional costs I'm afraid, but we will obviously, goes without saying, given the financial pressures that people face in South Africa today, try our utmost to keep that [tariff increase] as close as possible, if not exactly the same

Geordin Hill-Lewis, Mayor of Cape Town

Scroll up to listen to the full interview.

This article first appeared on CapeTalk : How City of Cape Town plans to protect residents from Nersa tariff hike