Mayor Geordin Hill-Lewis has written to the National Energy Regulator calling for the rejection of Eskom’s planned 44% tariff hike.

Eskom has yet to formally submit its application, but Hill-Lewis says early consultations have revealed their intention to ask Nersa for a 44% hike for electricity sales to municipalities, and a 36% hike for direct Eskom customers.

Hill-Lewis says this is a mammoth Eskom increase that Nersa must stop in its tracks, adding the economic impact will be immense.

‘It is unthinkable. On behalf of Cape Town households and businesses, especially small businesses, we are calling for the rejection of a 44% electricity tariff hike. The economic impact, and also the impact on especially lower income families, will be immense with the cost of living already so high.’

In the letter, the Mayor further cites the City’s concern that Eskom’s proposed increase will force consumers to pay for the parastatal’s poor operational choices, including the legacy of mismanagement and corruption.

‘We are calling on Nersa to marshal the independent expertise needed to assess Eskom’s cost structures and margins. We believe that Eskom can improve their efficiency, reduce costs, and develop new revenue streams rather than passing this huge increase on to consumers.’

Hill-Lewis says buying power from Eskom accounts for 70% of the City’s electricity costs, and there is no way the Metro can absorb the massive 44% increase while still hoping to offer a working electricity service to Capetonians.

‘We also know that households, businesses, and our economy can’t afford 44%, so the best approach is to stop this Eskom madness before it becomes reality.’

To shield lower income households from Eskom tariff hikes in recent years, Cape Town offers Lifeline electricity, under the following conditions:

• Property value qualifying threshold: R500 000
• Monthly household income threshold: R7 500 (if property value >R500k)
• Pensioner and grant recipient criteria: <R22 500 monthly income, regardless of property value

Hill-Lewis says Cape Town also reduced the cost of lifeline electricity in the last two years. In 2024/25, Lifeline customers using 600 units in a month, will pay R113,94 less compared to two years ago in 2022/23.

According to StatsSA’s Non-Financial Census data for municipalities, released in March 2024, Cape Town has SA’s highest proportion of residents benefitting from free basic water and electricity.