Cape Town’s electricity price hike under fire in court

The City of Cape Town’s recent electricity tariff hikes have ignited a fierce debate, with opposition parties warning that it will exacerbate the city’s existing inequality. 

The matter was contested in the North Gauteng High Court yesterday, with the National Energy Regulator of South Africa (NERSA) arguing that the hike is unlawful.

At the heart of the dispute is the city’s decision to implement tariff increases that exceed those approved by NERSA. 

In the previous financial year, NERSA approved a 7.4% tariff increase, but the city implemented a 9.6% increase. 

This year, the regulator approved a 15.1% price hike, but the city implemented a 17.6% tariff increase on top of its hiked price from the previous year.

The GOOD party has been vocal in its opposition to the tariff hike, with party supporters hosting a picket on the sidelines of the court-case.

GOOD Secretary General, Brett Heron, arguing that the city has neglected the needs of poor and working-class residents. 

Heron believes that these residents will bear the brunt of unaffordable electricity, particularly as affluent community members increasingly turn to solar power.

“The city says there’s a reduction in the sales of electricity. They’re encouraging people to go off the grid with solar but now they are saying there’s a loss of profit due to this,” he said. 

“It means that middle income and poor families are going to bear the brunt of a higher tariff,” Heron added. 

If the city loses the court case, it may be forced to refund over R600 million to residents, which Heron believes the metro has not budgeted for. 

The refund would be made in the form of electricity credits to already cash-strapped Cape Town residents.

The court case has sparked widespread concern among residents, with many arguing that the tariff hike is unaffordable. 

The city, meanwhile,  has defended its decision, saying it is in line with its plans to cover the cost of providing electricity and end load-shedding.

The case continues.