NEWS RELEASE                                                                                                   22 May 2002

CITY OF CAPE TOWN CONFIRMS THAT AVERAGE DOMESTIC ELECTRICITY TARIFF INCREASE WILL BE THREE PER CENT

The City of Cape Town has reaffirmed that the average increase in electricity tariffs for domestic consumers is only 3%.

Councillor David Erleigh, the City's Executive Committee member responsible for Trading Services, says the total income from the sale of electricity by the Unicity will go up by 3% from July.

He stressed that the 3% increase was an average figure. "The actual increase or decrease on each consumer's account will vary according to the area and the amount of energy consumed," he said. The variance according to area is due to the introduction of a single electricity tariff across the entire metropole.

Councillor Erleigh was responding to the column "Off My Trolley" written for Cape Community Newspapers by Brian Joss on 16 May 2002, who questioned whether the increases in fact averaged 3%. Councillor Erleigh gave two examples of how the uniform new tariffs to be applied from July would affect two consumers, one large and one small, in the old Cape Town municipal area.

In the first case, consumer A uses 100 kW.h a month of electricity, but only pays for 80 kWh as the first 20 kWh are free. The bill increases from the present 80 x 36.20 cents per unit = R28,96 to 80 x 38,82 cents a unit = R31,06, an increase of 7,25%

In the second example, consumer B uses 1 500 kW.h a month but pays for 1 480 due to the 20 kWh a month provided free of charge. The bill decreases from 1 480 x 36,20 cents a unit = R535,76 to (30 days x R1.12 service fee) plus 1 480 x 31,69 cents = R502,61, a decrease of 6,6%

Councillor Erleigh also rejected the claim in the column that the free 20kW.h lifeline electricity each month amounted to only R1,80. "In fact it amounts to R6,34 on the Domestic 1 tariff and R7,76 on the Domestic 2 tariff," he said. "I know that the tariffs are worked out by complicated formulae, but I can give the assurance that the average increase in only 3%."

He acknowledged that the increases in the industrial rate for electricity were far higher than the increases for domestic consumers, but nowhere near the 50% worst-case scenario quoted in the column.

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