Media Release

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STOP COCT RESPONDS:
ELECTRICITY TARIFF COMPLAINT AND MEDIATION BY NERSA REGARDING THE CITY OF CAPE TOWN

STOP COCT met on 10 September 2019 with the City of Cape Town and the Energy Regulator of South Africa (NERSA) regarding a multiple number of complaints around electricity tariff issues and practices implemented by the City. By invitation NERSA called the meeting as a Mediation session, however the City later reported this meeting as a normal, but closed meeting. Also, of concern is that STOP COCT representatives were turned away from the meeting and STOP COCT had to nominate 4 people at random to sit in on the mediation session.

Many of our issues were not addressed as the City chose to have a single representative who was not capable to deal with the many issues we had. The Electricity Director, Dr Les Rencontré, could not deal with billing issues, the City’s debt collection practices, Public Participation Issues, Electricity Budget issues or the effect of Property Values on electricity tariffs. STOP COCT had to accept that the City was going to only discuss the Home User tariff issue.

For months STOP COCT was asking questions around the discrepancy between the City’s implemented tariffs across all blocks versus what NERSA publishes as approved tariffs on their website. Since 2016 the City’s implemented electricity tariffs were between 2% and 18% higher than the NERSA approved tariffs. The example Dr. Rencontré chose to explain this, was the Home User Charge.

COCT R1,75
NERSA R1,52
Unregulated R0,23

The City Director explained the difference of R0,23 per unit in this block where the City tariff is higher than the NERSA approved tariff as an “unregulated” portion of the tariff. In the view of NERSA this addition to the NERSA approved tariff, is outside NERSA’s scope of regulation. The City told STOP COCT that no authority other than the City Council is needed to approve this unregulated addition to NERSA’s approved tariffs. The City add this “unregulated” amount across the entire Inclined Block Tariff (IBT) the City uses to set Lifeline, Domestic and Home User Tariffs. Since 2016 up to R0,32 was added, “unregulated,” to each unit of electricity Capetonian’s purchased. Quotation from the City of Cape Town’s Press Release on this issue: “The City reiterated its position that all components of the City’s electricity tariffs were approved by the relevant authorities namely NERSA and the City’s Council in accordance with applicable laws.”

This is of concern as a precedent has now been created by the City of Cape Town and accepted by NERSA which all Municipalities can now follow to add unregulated amounts to our electricity tariffs. Only Council approval is required.

STOP COCT alerts consumers across the country about this possibility through which Municipalities can now add unregulated amounts to electricity tariffs by seeking Council approval only.