Businesses and residents in Lydenburg under the Thaba Chweu Local Municipality are reeling from massive and unexpected increases in fixed electricity charges, with many fearing for their livelihoods as the municipality grapples with a staggering R1.6 billion debt to power utility Eskom.
The controversy centres on a sharp rise in the “capacity charge,” a fixed monthly fee based on the size of a customer’s electrical connection, which is paid regardless of how much power is actually consumed. The charge was implemented last year but saw a drastic hike in July.
Ari Hill, owner of a motor spare and restoration business that is heavily reliant on electricity, described the new costs as “unacceptable” and “killing our business.” Hill explained that before purchasing any pre-paid electricity, he must now pay a connection levy of R5,700. Last month, his total electricity bill skyrocketed to R12,000 from a usual amount of around R4,000.
“It’s killing our business and it’s going to kill the employment we can provide for the people,” Hill said. “The municipality must explain to us… we don’t know what criteria they use to make this so high. I think it’s unnecessary… The businesses won’t survive it.”
The Democratic Alliance (DA) has accused the municipality of acting improperly by implementing the new tariff structure before receiving approval from the National Energy Regulator of South Africa (NERSA). A DA representative provided a breakdown, explaining that customers are now charged R690 per amp on their circuit breaker. For a common 40-amp connection, this results in a fixed monthly charge of approximately R27,600 before any electricity is even used.
This represents a 119% increase from the previous year’s rate of R314 per amp. “The increases… were passed by council even before NERSA has approved the application for them,” the DA representative stated. He questioned the logic of the fee, pointing to the municipality’s ever-escalating debt to Eskom. “I’m giving them R27,600 per month. What for? I don’t see a decline in the Eskom account.”
In response, a municipal representative defended the process, stating that proper procedures were followed. They claimed the increases were discussed in Integrated Development Plan (IDP) consultative meetings and with civil society organizations, and were informed by a cost of supply study before an application was made to NERSA.
“It is NERSA that has the final say,” the municipal official said.
Despite this assurance, the explanation offers little comfort to struggling residents and business owners, who are now calling for the new charges to be suspended immediately as the community grapples with the soaring cost of keeping the lights on.