24 June 2008 – City of Cape Town residents may have to brace themselves for a 35.9% increase in electricity, despite the city council announcing a 20% increase in May.

electricityConsumers who’s use less than 400kWh per month will be spared the full increase, but will still have to pay 15.2% more for electricity.

This increase comes following the decision by Nersa to allow Eskom an average 27.5% increase from July 1. However, according to Ian Neilson, mayoral committee member for finance, warns that for bulk consumers such as municipalities, the actual increase is closer to 35.9%.

It has been reported that the city council could loose as much as US$52 million if tariffs are not increased further.

Another option being discussed is a 20% increase in July, with another 20.08% increase in October.

Either way, consumers will be paying an effective 35.9% more for electricity over the 2008/09 financial year.

Consumers who are considered low consumers of electricity are only allowed a 14.2% increase according to a NERSA ruling, but the City is proposing a 15.2% increase, in order to allow the council to recoup costs.

According to Neilson, this scenario has been discussed with NERSA and been deemed acceptable.