Electricity, water and other price hikes hitting major cities in South Africa

 ·24 Apr 2023

Residents of major metros across South Africa face alarming municipal tariff increases, with eThekwini residents facing the sharpest increases.

Several major metros in South Africa have tabled their draft budget proposals for the 2023/24 financial year, revealing hefty tariff increases for residents – including property rates, electricity, water, sanitation, and refuse removal.

Addressing the reasons for the proposed tariffs, many of the municipal mayors said that above-inflation Eskom, water board, and salary increases have made tariff increases inevitable.

However, some residents in South Africa are posed to step into deeper waters than others, with eThekwini Metropolitan Municipality drafting the steepest increases.

Although electricity price hikes are mostly in line with Eskom’s 18.49% increase approved by Nersa, eThekwini drafted a massive increase compared to other major metros. At the same time, the City of Cape Town has managed to shield its residents slightly.

eThekwini tabled a whopping 21.91% electricity tariff increase – 3.32% higher than Eskom’s 18.49% municipal hike – while its water tariff is set to increase by a notable 14.9%.

eThekwini Mayor Mxolisi Kaunda said this is a result of Umgeni Water’s approved tariff increase for bulk water is around 13%, although no explanation was given for the massive electricity increase.

On the other hand, the City of Cape Town has reduced Eskom’s 18.49% municipal rate increase to 17.6% by absorbing about R15 million a month.

According to Cape Town’s mayoral committee member for finance, Siseko Mbandezi, about 70% of Cape Town’s tariff income will go towards buying bulk electricity from Eskom, with the remaining 30% invested in service delivery and ending load shedding.

Additionally, the City of Cape Town has proposed a 1.1% decrease in property rates. This is due to the new 2022 valuation roll that will come into effect in July. Cape Town plans to give residents a break for properties valued at less than R5-million, with the first R450,000 of the property value exempt from rates.

By contrast, while the City of Johannesburg tabled a 5.3% property rate increase, this is in combination with the increase from the new valuation roll (12%), which means rates will increase by around 17% on average.

The table below outlines the proposed tariff increases across several major metros.

It must be noted that the City of Ekurhuleni’s planned increase in residential electricity tariffs by 15% was tabled before Nersa pronounced Eskom’s municipal tariffs, which leaves room for adjustments.

Municipality Rates Electricity Water Sanitation Refuse removal
City of Joburg 5.3% 18.65% 9.3% 9.3% 7%
Tshwane 5.0% 18.0% 9.2% 9.2% 6%
eThekwini 8.9% 21.9% 14.9% 11.9% 8%
City of Cape Town -1.1% 17.6% 8.6% 8.6% 5.5%
Ekurhuleni 4.4% 15.0% 12.0% 5.3% 5.3%
Nelson Mandela Bay 5.0% 18.49% 6.0% 6.0% 6.0%
Buffalo City 8.0% 18.65% 9.86% 5.3% 5.3%

The proposed electricity tariffs are subject to Nersa’s pending finalisation of its tariff guideline.

In April 2023, Nersa proposed that municipalities only increase electricity tariffs by 15.1% from July, and its final guidelines will likely be published in May.

Under its current proposal, if the 15.1% guideline is approved, municipalities – including the major metros – will have to limit their increases to this amount unless they have compelling reasons and a motivation to deviate.

This includes a cost of supply study, which only four out of 176 municipalities have fully implemented.

Read: Households in South Africa are taking a beating

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