September 26, 2021

High electricity prices continue causing headache for customers

High electricity prices continue causing headache for customers

High electricity prices have been the talk of the town across Cape Town since the hike of prices at the beginning of July.

Social movements have been started and pickets staged outside various buildings like Eskom in Bellville and Parliament.

Another group of people who are feeling the brunt caused by high prices are people getting their electricity from third parties and not directly from Eskom or the municipality.

Third-party electricity suppliers are contracted by a developer or a body corporate of the development to supply electricity.

They purchase bulk electricity from the municipality to resell and this usually makes prices higher for customers as compared to when one purchase directly from the supplier.

The City does not regulate the prices after selling bulk electricity to the resellers.

Sandra Dickson from lobby group Stop CoCT is part of the people who have been calling for the regulation of these suppliers as they are charging higher prices as compared to what the municipality charges.

“We see many prepaid slips from such residents where they are charged more per unit than the City of Cape Town tariff schedules.

“The tariff charged is not shown on the slips, nor are administration fees shown separately on these slips.”

Third-party suppliers are common in blocks of flats and sectional developments.

The City’s electricity by-law states that under section 20, sub-section (4) that “the tariff, rates and charges at which and the conditions of sale under which electricity is thus sold shall not be less favourable to the purchaser than those that would have been payable and applicable had the purchaser been supplied directly with electricity by the service provider”.

The above section begs the question as to why some Capetonians are paying significantly more per unit than what municipal tariff schedules state.

Alderman Ian Neilson, the City’s mayoral committee member for finance said charging more than what is on schedule is not allowed.

“However, this does not prohibit the reseller from charging an administration fee.

“Administration fees must be clearly shown on the receipts to residents or charged directly to the body corporate.”

He confirmed that third-party electricity suppliers were not regulated by the City of Cape Town, as the City has no contractual relationship with them.

“The City of Cape Town supplies some developments with a bulk supply which is normally charged at the appropriate commercial tariff.

“No discount is therefore given.”

Thulani Phike from Equal Right Forum has been staging pickets at various buildings against high electricity prices.

“Electricity prices are unacceptable, the increase is more than what the inflation rate.

“The City of Cape Town and Eskom have a role to play in decreasing these prices and we will continue putting pressure on them.”

In its defence, the City said they absorbed more of the price surge than any other metro in the country for customers that get electricity from them.

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