NEWS RELEASE                                                                                        27 March 2002

SINGLE ELECTRICITY TARIFF TO BE INTRODUCED IN CAPE TOWN FROM JULY

Electricity tariff increases due in Cape Town on 1 July this year have been cut to only three per cent and all customers supplied by the City of Cape Town will pay the same tariff for electricity from that date.

This comforting news for consumers was announced today by the Executive Committee member responsible for City Infrastructure, Councillor David Erleigh.

“I’m pleased to say that the City of Cape Town is well on track with its target date for the implementation of tariff convergence,” Councillor Erleigh said. “Achieving a single tariff for all our customers was a technical and financial challenge that we have been able to meet.”

Before the new City of Cape Town was born, the six metropolitan local councils applied their own tariffs. As a result, the increase to be introduced in July 2002 – the normal annual increase – varies according to the administration area.

In a complex operation aimed at achieving tariff convergence by July this year, tariffs were increased in Cape Town and South Peninsula in July 2001, while tariffs in the other local council areas were increased in January 2002. The increase in July 2002 will bring all administration areas into line, and henceforth there will be one annual adjustment for all consumers. 

Councillor Erleigh said that the low three per cent average increase in tariffs was made possible by an expected increase in demand and by extensive cost-cutting.

“This should be seen in the context of Eskom increasing its supply costs by 6,2 per cent in January 2002 as well as an anticipated increase of seven per cent in January 2003,” he said.

The 1,6% surcharge introduced in July 2001 to recover revenue lost due to the provision of 20 KWh of free “lifeline” electricity to all consumers directly metered by the City of Cape Town will be retained but not increased.

The proposed tariff increases have been extensively workshopped in Council committees and will be published in the press for comment.

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