- Tariff restructuring is midway; further increases in fixed charges are likely.
- The process followed in restructuring municipal electricity tariffs appears questionable,
potentially opening tariffs to legal review.
- The claim of “revenue neutrality” remains unverified.
- The Overstrand Municipality has not responded to recent requests for further information
or meetings.
Over the past several weeks, the Overstrand Accountability Collective (OVAC) has engaged via
email with the Overstrand Municipality regarding concerns over revised electricity tariff
structures. The municipality has since become unresponsive, and requests for a meeting have
been steadfastly ignored.
The engagement was prompted by widespread concern from residents about affordability,
particularly the sharp increase in fixed electricity charges.
Of particular concern is the impact on low-income households, who now face monthly charges
in the region of R800 even where no electricity is used at all. The same applies to households
with solar installations that purchase minimal electricity, as well as holiday homes that remain
vacant for much of the year.
According to the municipality, a tariff restructuring process is underway based on the 2022 COS
study, aimed at greater equality in how electricity users are charged. The restructuring is being
implemented over four years (from 2024/2025), implying continued increases in fixed charges
until 2028.
The municipality has stated that the restructuring is “revenue neutral”. No supporting evidence
for this important claim has been provided, and no clarity has been given on the final tariff
structure once the process is complete.
Significant concerns remain regarding procedural compliance and transparency in this process,
particularly in relation to public participation, which appears inadequate.
It appears that the COS study was not made available for public written comment. Obtaining
access proved difficult. A search of the municipal website yielded no results, and it was only
later pointed out by Mr Muller that the document was attached to the minutes of anInfrastructure
Portfolio meeting dated 24 April 2023. Ratepayers would need to be positively clairvoyant to
locate it, or otherwise search through extensive sections of the municipal website. It was
however recently added to the Municipal website after OVAC pointed this out in public.
A council resolution on 24 April 2023 provided for public meetings on the COS study. Instead, a
presentation was reportedly delivered by Mr Muller in four of the fourteen wards as part of
routine ward meetings.
Further uncertainty arises regarding formal council approval of the COS study. According to Mr
Muller, it was approved by the then Executive Mayor, Dr Annelie Rabie, on 22 November 2023,
although no written confirmation has been provided. OVAC’s search of the municipal website
shows no record of a meeting on that date, and it remains unclear through which formal process
the approval occurred. This raises questions regarding compliance with the Municipal Finance
Management Act (MFMA), the Municipal Systems Act, and applicable tariff-setting
Requirements.
Council did, however, approve the 2024/2025 tariff increases, reportedly based on the COS
Study.
Considering the above, OVAC is of the view that the process may have been procedurally
flawed and potentially inconsistent with statutory requirements. The public uncertainty about the
process and its outcomes points to deeply insufficient public participation. OVAC strongly
objects to the municipality’s refusal to continue engagement and calls for a transparent
renegotiation process to ensure electricity pricing remains lawful, fair, and affordable for
Residents.
Anton Kruger
OVAC
