A war of words has erupted between the Patriotic Alliance (PA) and the Democratic Alliance (DA) over Cape Town's electricity tariffs. PA mayoral hopeful Cheslyn Daniels has accused DA councillor Angus McKenzie of blaming Eskom for high electricity costs, saying the City determines the tariffs ultimately paid by residents. Daniels claims the City sets its tariff structure, adds service and wires charges, approves them through its budget, and collects the money.
McKenzie has hit back, arguing that Eskom remains the biggest driver of electricity costs. He said Cape Town does not control the price of electricity Eskom produces and sells to the City. About 70% of the City's electricity tariff income goes towards buying bulk power from Eskom, McKenzie said. He also pointed to Eskom's rising costs and called for greater competition in the electricity market.
The municipal tariff increased by 9.01% for the 2026/27 financial year, while Cape Town limited the average residential increase to 6.64%. According to the City's 2026/27 budget documents, the overall average electricity tariff increase was 6.67%, with different customers affected differently. The City's Mayco member for Energy, Xanthea Limberg, rejected Daniels' suggestion that the City's tariff structure is a major independent driver of electricity costs.
Limberg said the tariff consists of both fixed and consumption-based components, with the fixed portion covering costs that remain regardless of how much electricity is consumed. Approximately 70% of tariff income goes towards bulk electricity, while the remainder covers electricity services and infrastructure. The City is taking steps to reduce its dependence on Eskom, including concluding power purchase agreements with independent producers.
In August, the City concluded its first power purchase agreements with independent producers, covering 70MW, as part of a programme targeting up to 200MW. The agreements are 19% to 21% cheaper than current Eskom rates over 20 years. The City says all income is used to buy bulk electricity from Eskom and cover the cost of service provision, including maintaining the electricity infrastructure and network.
Daniels said under his mayorship, the PA would focus on providing financial relief to struggling households, including a proposed municipal debt write-off and a three-month rates payment holiday for pensioners. He challenged McKenzie and the City to publish how much electricity is bought from Eskom, how much residents are charged through tariffs and fixed charges, and how the money is spent.
The clash comes as political parties prepare for the upcoming local government elections, with electricity affordability emerging as a major issue for households. McKenzie maintains that breaking Eskom's monopoly and increasing competition is key to reducing electricity costs.
Key points
- The Patriotic Alliance and DA are at odds over who is responsible for high electricity costs in Cape Town.
- The City's electricity tariff increase was limited to 6.64% for residential customers.
- The City is taking steps to reduce its dependence on Eskom, including power purchase agreements with independent producers.
