The cities of Cape Town, Johannesburg and eThekwini all presented their 2021/2022 financial budgets this week, detailing how much more residents can expect to pay for electricity and other rates from July.
From 1 April 2021, the National Energy Regulator of South Africa (Nersa) approved Eskom’s allowable revenue from standard tariff customers to be increased by 15.06% for Eskom direct customers.
An estimated increase of 17.80% for the supply of electricity to all municipalities will be implemented on 1 July 2021.
However, each of the country’s major municipalities has announced their own individual increases to be applied from 1 July 2021 based on their approved budgets.
While all three cities said that they aimed to reduce costs for South Africans who have taken financial strain during the Covid-19 lockdown, the impact of national government increases and mounting municipal debts means that residents can largely expect similar increases.
“The rest of the country has been impacted by tariff increases and our municipality has not been spared,” said eThekwini mayor Mxolisi Kaunda in his presentation on Thursday (27 May).
“However, we have managed to cap our tariff increases at the lowest we have ever seen in the last five years.
“This is over and above the Eskom bulk electricity increase and the Umgeni Water Board bulk water increase which are out of the control of the municipality. Despite all the challenges, we have tried to keep the increases to affordable levels considering the tough economic climate facing our residents.”
Below is a comparison of how much each city will be increasing rates later this year.
Gerhard Kotzé, managing director of the RealNet estate agency group, said that property owners across the country will bear the brunt of these price hikes – not just in the three major cities.
For most households, the cost of both water and electricity is set to rise substantially from July, which is when most local authorities implement their new annual tariff structures, he said.
“Those who receive their electricity supply directly from Eskom will already be experiencing an increase of around 15%, and electricity costs in most municipalities are expected to rise by the same percentage from 1 July, thanks to the recent High Court order formalising an agreement between Eskom and the National Energy Regulator.
“Meanwhile municipal water costs are expected to increase by between 6% and 10% this year, having already risen by far more than the rate of inflation over the past few years, while refuse removal and sanitation cost increases are also expected to be higher than the rate of inflation in most cases.”