Electricity increases make life harder for poor people

1 July marked the increase of the electricity tariffs in Cape Town. The increase was by 7.86%. Too much according to the Congress of South African Trade Unions (COSATU) which has threatened to go on strike if the increase is not removed.

Sibongile Rali, a Gugulethu resident and 49-year-old mother of four, believes that the increase is too much, especially for the “poor”. “I am unemployed and my husband is the one that works. We have four children to take care of and a whole household to maintain. Electricity of R20 has become useless to use and we only buy it when times are really tough. R20 electricity used to last at least two days, but now it hardly lasts a day. Before [when we uploaded new vouchers into the electricity metre] the units were about 25, but now they’ve gone down to about 18 units.”

Her story is not unusual.

“We receive the free basic electricity each month when we buy electricity, but even that has been cut down. I don’t clearly understand how these increases are decided. We don’t have a geyser so we constantly use the kettle and stove to boil water for bathing, cooking and other necessities. There are six of us in the house. We all have to wash and sometimes we are forced to use two kettle measures because the water is too little or it is cold. Then there is the stove as well where at times while the pots are boiling on it, I am also waiting for the kettle to boil … We try as much as possible to save electricity including doing what they say on TV, to switch off lights in rooms that are not in use, but no, having to use almost half of one salary on electricity is not right,” said Rali.

A statement by COSATU accused the City of Cape Town of using the cost of electricity to subsidise other services. It said the City should be charging the wealthy higher rates and use these additional funds to cover the cost of rolling out services.

“The increases are exorbitant already and added to this is the cuts in the amount of free electricity given to poorer communities. This formula for reducing the amount of free electricity does not make any sense and it prejudices the poorer users. COSATU will go on strike to stop this unfair treatment and to compel more equitable pricing formulas.”

The City’s deputy mayor and mayoral committee member for finance, Ian Neilson, confirmed that the average increase was 7.86%, but the particular increase varied across the different tariffs.

In response to how exactly the percentage of the tariffs was arrived at, he said: “The biggest contributor to the increases is the increase in the tariff for Eskom’s bulk supply to this city. These bulk supply costs are 68% of the costs of the City’s Electricity Department. Other cost increases, such as salaries, repairs and maintenance of the distribution network, capital improvements and expansions, contribute the rest.”

Regarding COSATU’s threat to strike against the increases, Neilson said the tariffs were adopted through a due process and were approved by the National Energy Regulator of South Africa. “They are well considered to ensure the most affordable tariffs to all consumers especially poor households, while still balancing the city’s books. The tariffs will not be changed.”