High electricity prices have been making headlines throughout Cape Town since the price hike in early July.
Social movements were launched and pickets organized in front of various buildings such as Eskom in Bellville and Parliament.
Another group of people who suffer the consequences of high prices are those who obtain electricity from third parties and not directly from Eskom or the municipality.
Third party electricity providers are contracted by a developer or development legal person to provide electricity.
They buy electricity wholesale from the municipality for resale, which usually makes the prices higher for customers compared to buying direct from the supplier.
The City does not regulate prices after selling electricity in bulk to resellers.
Sandra Dickson of the Stop CoCT lobby group is among those calling for regulation of these providers because they charge higher prices than those charged by the municipality.
“We see a lot of prepaid slips from these residents where they are charged more per unit than the Cape Town rate schedules.
“The billed rate is not indicated on the sheets, nor the administration costs indicated separately on these sheets. ”
Third party vendors are common in apartment blocks and sectional developments.
The City’s electricity by-law stipulates that under article 20, paragraph (4) that “the tariff, tariffs and charges at which and the conditions of sale under which electricity is so sold shall not must not be less favorable to the purchaser than those which would have been payable and applicable if the purchaser had been supplied with electricity directly by the service provider ”.
The section above raises the question of why some Capetonians pay much more per unit than what municipal tariff lists provide.
Alderman Ian Neilson, a member of the city mayor’s finance committee, said he was not allowed to charge more than expected.
“However, that does not prevent the reseller from charging an administration fee.
“Administration costs should be clearly indicated on receipts to residents or billed directly to the corporation.”
He confirmed that the third-party electricity providers were not regulated by the City of Cape Town, as the city has no contractual relationship with them.
“The City of Cape Town provides some developments with a bulk supply which is normally billed at the appropriate commercial rate.
“No discount is therefore granted.”
Thulani Phike of the Equal Right Forum organized a picket line in various buildings against high electricity prices.
“Electricity prices are unacceptable, the increase is greater than the rate of inflation.
“Cape Town and Eskom have a role to play in lowering these prices and we will continue to put pressure on them.”
In its defense, the city said it has absorbed more of the price hike than any other metro in the country for customers who get their electricity.