‘Bleeding us dry’ — Capetonians slam ‘unacceptable’ Eskom tariff hike as public hearings start

CAPE TOWN, SOUTH AFRICA - NOVEMBER 18:Capetonians protest against Eskom tariff hike outside Cresta Grande where the National Energy Regulator of South Africa (NERSA) public hearing took place on November 18, 2024 in Cape Town, South Africa. The Democratic Alliance (DA) stated that the rising costs of living would make it difficult for citizens to afford electricity, especially in the face of inflation which stands at 4%. (Photo by Gallo Images/Brenton Geach)

By Suné Payne and Ethan van Diemen

18 Nov 2024

If Eskom’s proposed 40% tariff increase were to be granted, consumers might have to switch off their fridges so they can afford to keep the lights on. This was the message from Cape Town residents as public hearings into proposed tariffs kicked off.

‘Honestly, 40% is unacceptable,” said Cape Town resident Denise Human before a public hearing into the proposed electricity price hike.

On Monday, 18 November, ahead of the public hearing by the National Energy Regulator of South Africa (Nersa), a large group of picketers from the DA called for the proposed 40% hike to be scrapped. Human was in the crowd.

The DA – a vocal critic of the increases that has even launched a petition against it – was led by people holding signs such as “Nersa don’t bleed us dry” and “Electricity is a need, not a luxury”.

Speakers included DA federal chairperson Ivan Meyer, who claimed the increase would force businesses to close. At one point he called the increases a “corruption tax”, an allusion to Eskom’s history with corruption and State Capture. He said DA mayors across the country opposed the hike.

“Eskom’s proposal is unaffordable and it is costing South Africans millions,” Meyer added.

Cape Town mayor Geordin Hill-Lewis said the hike was too high. “When you get massive increases like this, the fact is, Nersa and Eskom are bleeding us dry.”

The mayor added: “Here in Cape Town and here in the DA, we say ‘ons is gatvol van Eskom se pryse’ (we are gatvol of Eskom’s prices).

Denise Human, a resident of Cape Town, says the proposed 40% tariff increase by Eskom is unacceptable as there are many seniors who are unable to afford electricity. (Photo: Suné Payne)

Eskom Nersa Mayor Geordin Hill-Lewis and premier Alan Winde with Cape Town residents protest against the proposed Eskom tariff hike outside Cresta Grande on 18 November 2024. (Photo: Gallo Images / Brenton Geach)

‘Electricity is a big problem’

For residents, the working class in particular, the hike could mean a choice between electricity and food.

Sandra Damonse, a representative of faith-based organisations for Ward 9 in Bellville South, said the increase would make a bad situation worse.

“We are from a poor community and we can’t keep up with this big hike of the electricity. I am fighting here, I haven’t got great-grandchildren yet but I’m fighting for my great-great-great-grandchildren so that they can have a better life.”

Speaking to Daily Maverick just before the public hearings, Damonse explained what the increase would mean for her personally and people in her community. “We are already without warm water, we don’t use our geyser. We’ve got a nice bath, we’ve got a nice shower but you can’t use it because [the price of] electricity is too high and we can’t afford to keep the geyser on so we are washing in the basin for some time now.”

If Eskom’s tariff increase were granted, Damonse said, “maybe we will have to put off our fridges because then we can only afford the lights”.

She had one main message for the power utility: “Eskom, you are above the average that the government gives us on pension. I’m a pensioner. What do you think? How do you think we as pensioners will live? We will go down in poverty with your hike, so please listen. Electricity is a big problem.”

Elsie Mano and Cynthia Majiet from Belhar say that they can barely afford electricity and that a further increase would push them into poverty. (Photo: Ethan van Diemen)

DA federal chairperson Ivan Meyer described Eskom’s proposed tariff increase as a ‘corruption tax’ and a ‘death certificate’. (Photo: Ethan van Diemen)

Another pensioner, Denise Human from Belhar, said: “Honestly, 40% is unacceptable.” She relies on her old-age grant of R2,180, along with occasional cake orders. She spends R400 a month on electricity and says the proposed increase would be catastrophic, especially for the elderly.

Human told Daily Maverick that Eskom could cancel the 40% increase.

“Look around at our seniors… We need to look after our children, our grandchildren from that R2,000 support, by buying food,” she said, adding: “There are seniors in our communities that really can’t afford to spend R400 on electricity.”

Another Belhar resident, Elsie Mano, said: “If you make food now, sometimes you are not even done with your food and the electricity is up. So it’s a struggle. Everybody in Belhar struggles with the little electricity we get now and it’s not fair.”

Why the increase?

Asked how it balances its needs and those of the broader economy as it relates to the desired tariff increase, Eskom told Daily Maverick that “the key principle of the 2006 Electricity Regulation Act (ERA) is that it must enable an efficient licensee (Eskom in this case) to recover efficient costs and a reasonable margin of return. Eskom has made its revenue application based on the costs it will incur to efficiently provide electricity to the customer and it is a critical component in ensuring Eskom continues to provide reliable electricity services while improving its financial sustainability, through a migration to cost-reflective prices.”

Western Cape premier Alan Winde joins protesters, arguing that Eskom’s proposed tariff hike will cause devastation in the province (Photo: Ethan van Diemen)

Capetonians protest against Eskom’s proposed tariff hike outside Cresta Grande in Cape Town on 18 November 2024. (Photo: Gallo Images / Brenton Geach)

The utility added that it has been “dependent” on government support in the form of debt and equity “to a total amount of over R400-billion”, and that if the price of electricity “does not reach cost reflectivity, this support will come to naught”.

Business Maverick previously reported that from today until 4 December 2024, Nersa will consult the public on Eskom’s application to increase electricity tariffs by 36.15% during its 2026 financial year, 11.81% in 2027 and 9.10% in 2028. If approved by the regulator, the first increase for customers Eskom supplies directly will be implemented from 1 April 2025.

Read more: After the Bell: Eskom’s profitability will make it hard to justify higher electricity tariffs

According to Nersa, Eskom’s revenue application amounts to R446-billion for the 2025/26 financial year, R495-billion for 2026/27 and R537-billion for 2027/28.

DA are ‘hypocrites’

While DA held its picket, however, the GOOD party, a vocal critic of the former, described the protest as “irony and hypocrisy”.

GOOD’s Brett Herron said: “We fully agree that the revenue application by Eskom cannot be approved because it will translate into outrageously high and economically dangerous electricity tariff increases to domestic and commercial customers.”

Herron said that the DA calling Nersa’s tariff hike “extortionate” was the definition of the pot calling the kettle black. “In Cape Town, it is the DA-led government that is putting consumers under pressure by charging exorbitant and illegal rates,” he said.

Last year, GOOD joined several protests in the city against the municipality’s 17.6% electricity tariff increase, which came into effect in July 2023. At the time, Nersa’s increase was 15.1%.

Read more: Capetonians take to the street to voice their grievances about the 17.6% rise in electricity prices

Herron said: “In the 2022/23 financial year, Nersa approved a 7.4% tariff increase, but Cape Town implemented a 9.6% increase. In the 2023/24 financial year, Nersa approved a 15.1% increase, but the City implemented a 17.6% tariff hike on top of its hiked price from the previous year… By the GOOD party’s calculation, Cape Town’s over-charges have forced residents to cough up at least R660m extra over the past two years.”

The party is scheduled to make a submission to Nersa over the course of the public hearings in Cape Town.

Asked for his response to the GOOD statement, the mayor said: “We’ve tried to explain the structure of how electricity prices are set in South Africa so many times and they know this… Well, it’s just, it’s just politicking.”

Hill-Lewis said the base price was set by Nersa, based on Eskom’s applications. At the same time, the City had to cover additional costs such for streetlights in the CBD, for instance. This included maintenance, vandalism and cable theft prevention in a bid to keep power running in the city’s economic heartland.

The mayor and premier Alan Winde said that if there were increases, they should be linked to inflation, which is currently 3.8%, as recorded in September. DM

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