Setting record straight on tariff hikes
AS readers have pointed out, the front-page article “Residents revolt over rates hikes” (Cape Argus, August 4) contains some gross inaccuracies. The biggest is that the article mentions the home-user tariff, or daily service charge, of R8.21 from the draft budget.
After public consultation, it was decided not to implement this tariff this year to give residents more notice of the proposed charge.
Much comment has been made about electricity tariffs and rates. As it pertains to increases as such, the great majority of increases have been well within the inflation range.
Tariffs are set in order to cover the cost of buying electricity from Eskom as well as maintaining the network infrastructure, while facilitating a sustainable level of support between indigent and non-indigent customers.
There is also a 10% contribution to the rates account. This ensures that those who otherwise would not contribute towards rates-funded services (roads/parks/libraries/clinics, etc) do so. Without it, the City would have to substantially increase property rates.
On another matter, we had an unsustainable situation where those who are not indigent were being highly assisted as it pertains to electricity costs.
We had been moving such users off the lifeline tariff to the domestic tariff for the past few years. From July 1, the last batch of 44 000 users were moved based on property value.
Property value is used to determine indigent status (indigent in this context is defined as “lacking the basic necessities of life” by the National Framework for Municipal Indigent Policies).
The City understands this is not a perfect onesize-fits-all solution, but this is the best indicator we have available. Ideally, the City would be able to make tariffs sensitive to household income, but we currently have no means to reliably keep track of this.
Last, costs are still based on consumption, so the less you use, the less you still pay. COUNCILLOR JOHAN VAN DER MERWE Mayoral Committee Member for Finance City of Cape Town