Electricity price to be hiked by 14,9% for Durban residents

eThekwini Municipality has announced double digit price hikes for electricity in its R52 billion draft 2021/22 budget saying it has kept the increases “at an all time low” despite having to pass on Eskom’s price inflation.

Mayor, Mxolisi Kaunda, said the tariff increases were mainly due to Eskom electricity price inflation and the Umgeni Water Board’s bulk tariff increase which were above inflation and out of the city’s control.  In addition, he said the city had to make provision for a Consumer Price Index (CPI) related increase in staff salaries.

“Despite all the challenges, we have tried to keep the increases to affordable levels considering the tough economic climate facing our residents,” Kaunda said.

He said property rates and refuse tariff increases had been kept to a historical low of 4.9%. The water and sanitation tariff increase is 8.5% for both residential and businesses due to the Umgeni Water Board increase of 7%, which the city has passed on to residents.

The Eskom bulk tariff increase for electricity is 17.8%, resulting in the city hiking electricity prices by 14.9%, which is the National Energy Regulator of South Africa’s (NERSA) recommended increase for municipalities.

The Draft Budget for the 2021/22 financial year was tabled for public consultation at the sitting of Full Council at the Durban Inkosi Albert Luthuli Convention Centre this week.

The consolidated budget – operating and capital expenditure – amounts to 52.3 billion, comprising an operational budget of R47 billion and a capital budget of R5.3 billion. 

The city said it had prepared the budget, including electricity price and other tariff hikes, taking into consideration the major strain facing the national economy, low economic growth and high unemployment.

“This is a pro-poor budget with many elements that relieve the burden on consumers, particularly, the tariff increases,” Kaunda said.

The 2021/22 Draft Budget includes a social package programme, to the value of over R4.7 billion, coupled with the recently adopted Indigent Policy where customers that are struggling to pay for services, benefit from the below basket of services.

• Rates: Residential Properties valued up to R 230 000 will be exempt from paying rates. All other properties valued above R 230 000, the first R 120 000, no rates charged. 
• A further allowance will be afforded on application to all residential property owners with a total household income of R3760 and less and with a property value of more than R230 000 and less than R500 000.
• Pensioners, child-headed households, disability grant recipients and medically boarded people are exempt from paying rates, where their annual rates do not exceed the maximum rebate of R 5 290. All other properties will be liable for tax less the rebate.
• No rates levied on the first R 30 000 value of vacant land and Outside the Urban Development Line.
• Water: The first 6kl of water is free to households with property values under R 250 000.
• Electricity Price: The first 50kwh of electricity is free to residents using less than 150kwh per month in Eskom reticulated areas. The first 65kwh of electricity is free to residents using less than 150kwh per month in eThekwini reticulated areas.
• Refuse Removal: Residential property valued up to R 250 000 are exempt from domestic refuse removal tariff. In addition, a free basic refuse removal service is also available to indigent consumer units living in rural, informal settlements and non-kerbside residents.
• Sanitation: The first 6kl of effluent disposal is exempt for all properties with values under R 250 000. In addition, a free basic service is also available to indigent consumer units with VIP’s, urine diversion toilets and in informal settlements serviced by means of a toilet/ablution block within 200m.

The draft Budget will be consulted regionally together with the draft Annual Report and the draft Integrated Development Plan starting in April. Consultation will also be held through various digital media platforms.

The deadline for submissions is 15 May 2021 and the final budget will be adopted at the end of May 2021.