Potential electricity price increase of 24% in July 2015

One way to prevent Load Shedding is to make electricity unaffordable:

CITY OF CAPE TOWN

19 MARCH 2015

STATEMENT BY THE CITY’S EXECUTIVE DEPUTY MAYOR, IAN NEILSON

City concerned at Eskom’s application to NERSA

The City of Cape Town yesterday received correspondence from Eskom with respect to their reopening of the MYPD 3 determination in an application to the National Energy Regulator of South Africa (NERSA).

This application is a request from Eskom for a reopening of the current tariff fee so that an adjustment in the revenue requirement be considered during the 2015/16 financial year, which equates to a price adjustment of an additional 9,58%. This is in addition to the already announced 12,69% for 2015/16.

The City of Cape Town is very concerned that this application has come so late in the process for the drafting of budgets by municipalities.

Our draft budget to be tabled next week, including the City’s electricity tariffs, is based on the approved 12,69% increase.

If Eskom’s application is approved, this will result in a staggering 22,27% increase in bulk electricity tariffs in just one financial year, which the City will have no option but to pass onto our own customers.

This puts us in the unfortunate position of having to tell our customers, at this late stage of the budget cycle, that the draft budget that will go for public participation next week has not considered this unexpected new possible price hike and that the tariff increases proposed may have to be further significantly increased if NERSA agrees to the Eskom application.

The size of the proposed increase may be unaffordable to many of our electricity customers, particularly the residential users.

We apologise to our customers in advance that we will have to proceed with a budget announcement on electricity tariffs that will likely increase even more than tabled, but this is not of our own making.

We call on NERSA to resolve this application as a matter of urgency.


End

Issued by: Integrated Strategic Communication, Branding and Marketing Department, City of Cape Town.