GEORGE NEWS - Various ratepayers' and residents' organisations have raised their objections to the electricity tariff increases proposed by George Municipality, set to be phased in over the next five years, and warned of a severe financial impact on households and businesses.

Dr Dennis Farrell of Garden Route First says the municipality's proposed cost of supply (CoS) phase-in strategy, announced last week, will result in ratepayers facing an effective increase of between 17% and 22% in the 2026/27 book year.

Over and above the annual Eskom increase, ratepayers will cough up for an additional yearly increase on the basic electricity charge up until the 2029/30 financial year. According to the municipality's CoS study report, tariffs will by then have caught up with the real cost of supply, which is the intention of the strategy. Year 1 of the phase-in is the 2025/26 financial year in which a once-off across-the-board increase of 10.9% is being charged.

For 2026/27, Eskom's increase on its bulk supply to the municipality is a proposed 9.01%. The municipality proposes adding 1.49% to this, passing on an increase of 10.5% to the ratepayer, with a further 13% CoS adjustment. This includes a 100% increase in streetlight charges. A fixed charge for streetlights was introduced since the CoS study found they had been undercharged.

Farrell said the CoS report "admits that administrative overheads are allocated based on turnover, which overstates the true share of the cost … by more than 50%". Furthermore, the report states that records for customer service and metering costs "are not kept", rendering "cost-reflective" targets subjective assumptions rather than verifiable data.

The objecting groups also pointed to municipal financial data showing that the electricity department had generated a surplus of R225.5 million in the 2024/25 financial year, suggesting that electricity revenues are being used to subsidise other parts of the municipal budget.

The municipality was also criticised by ratepayer groups for making the CoS and phase-in strategy documents available to the public at short notice, following an invitation issued at the beginning of last week (9 March) to attend public information meetings in various neighbourhoods. Public input must be submitted by 24 March.

Dr Dennis Farrell

Farrell described a written request (dated 11 March) by Mayor Browen Johnson to the National Energy Regulator of South Africa (Nersa) - urging it to "immediately cease" planned electricity tariff increases and re-evaluate Eskom's application - as a "smokescreen" aimed at turning away attention from the proposed additional tariff hikes.

In his comment to the municipality, he calls for the total increase to be capped at the 9.01% Nersa-approved rate and for the 13% CoS adjustment to be suspended until the 50% overhead misallocation is audited.

Rising cost of living

The George Ratepayers' Association (GRPA) committee said the current trajectory in the price of electricity in George indicates a rising real-term cost of living that is becoming unsustainable.

"The standard residential electricity tariff in George has climbed from 194.14c/kWh in 2020/21 to an estimated 310.19c/kWh in 2024/25, with projections reaching 375c/kWh by 2026/27."

Reacting to the George Municipality's cost of supply (CoS) phase-in strategy report released last week, the GRPA said sustainable, alternative solutions should be found to reduce the municipality's heavy reliance on electricity revenue for its financial stability.

Path and Profit, a group of residents opposing the municipality's proposed electricity tariff hikes for the 2026/27 book year, said 20-amp households will face a 17% increase and larger homes a 22% escalation in access charges, so even with low electricity usage, they will be significantly impacted. This is despite the fact that the municipality admits in its CoS study already overcharging average households and businesses. "Yet we are exactly the group that will be hit the hardest in this new plan."

'Energy poverty trap'

Farrell said the current policy of restricting indigent support to a 20-amp supply is a barrier to dignity. A 20A limit (4.6kWh) prevents a household from using a kettle and a stove simultaneously, forcing poorer residents into an "energy poverty trap" where they must either limit usage severely or move to a higher 40-amp tariff, at significantly higher costs.

According to the CoS study report, the tariff category with the biggest adjustment required are the non-indigent domestic and commercial customers.

This table from the cost of supply study report shows the municipality's proposed annual increases from the current financial year to 2030.

The study found that:

• indigent customers were undercharged with no fixed charge levied, among others.
• non-indigent domestic customers were close to or slightly being overcharged.
• commercial customers without basic charges are overcharged when average consumption is high and undercharged when low.
• all other commercial tariffs were overcharged.
• streetlight tariffs were low and did not cover maintenance costs.

The report states that the phase-in approach will result in an overall increase of 7.86% experienced by customers. There are only a few customers with increased bills higher than that increase amount.

In the 2026/27 year, a surplus of R3.64m should be realised, a profit margin of just above 0.26%, when implementing the proposed rates from the phase-in strategy.

Mayor  responds

The mayor, Browen Johnson, rejected the allegation that his letter to Nersa is a smokescreen. "As executive mayor, it is both necessary and appropriate that I represent the concerns of our residents and ensure that their voices are heard at all levels of decision-making. The purpose of the letter is to place the lived realities and sentiments of our communities firmly before Nersa.

"This forms part of a broader process. The municipality is currently conducting public participation sessions across all 28 wards to inform residents about the proposed tariff increases and their potential impact, while also providing a platform for meaningful input.

"These submissions will be formally recorded and consolidated to strengthen our engagement with Nersa. We remain committed to listening to our residents and will continue to advocate on their behalf, using every available avenue to protect their interests."

George Mayor, Browen Johnson

George Municipality recording public feedback

In response to residents' concerns, the municipality said it is currently recording and consolidating all feedback received from the public during the ongoing public participation process. "This input will form part of the final report to Council. Public participation meetings conclude this week, and the official comment period remains open until 24 March. 

"Members of the public are encouraged to submit their inputs through the designated official platform to ensure that all comments are properly considered.

"At this stage, it would be premature to respond in detail to specific issues raised, as the public participation process is still underway. The municipality will provide comprehensive responses to the matters raised once the process has been concluded and all submissions have been duly reviewed."

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