Cape Town dam levels increase to 98,2%

22 September 2020

The total capacity of dams supplying the Cape Town metro increased to 98,2% between 14 September and 21 September 2020, a 1,8% rise from the previous week. Water consumption for the same period increased by 19 million litres per day from an average of 647 million litres per day the previous week to 666 million litres per day. At the same time last year, dam levels were at 82%. The increasing dam levels over recent weeks is being taken into account in terms of which water restrictions and tariffs will apply over the summer months.

In summary:

• The City does not budget for profit/surplus from the sale of water and seeks to keep costs of service delivery as low as possible.
• Tariffs are currently on the second lowest level, Level 1 and are much lower than during the peak of the drought. Lowering of tariffs is currently being considered, but this should not be at the risk of significant revenue deficit. The lowest tariff level, being the no restriction, water-wise tariff, is currently being considered for implementation. It is slightly lower than current Level 1 tariffs.
• The Fixed Basic Charge is to remain in place. This charge is not a penalty or a surcharge. It is part of the total tariff structure and helps to pay for water services. It remains in place to help cover the cost of water provision. 
• Residents who are registered as indigent are exempt from paying the fixed basic charge portion of the water tariff, and continue to receive an allocation of free water.

With dams close to full, the City of Cape Town has been fielding numerous queries around what this means in terms of water restrictions, and especially water tariffs.

‘The City is currently reviewing tariffs and water restriction levels, in anticipation of the start of the new hydrological year (beginning November). Final decisions will be made in consultation with the National Department of Water and Sanitation who will take the lead in planning for the new year, and the other municipalities and irrigation boards with whom the City shares the dams. 

‘In the meantime we want to thank residents and businesses for the role they have played in allowing dams to recover, including both saving water and paying their accounts on time, as this is key to providing and maintaining a sustainable, reliable water service for all,’ said the City’s Mayoral Committee Member for Water and Waste, Alderman Xanthea Limberg.

For more information on new water sources, water restrictions (Level 1 currently in place), guidelines around alternative water sources such as boreholes and rainwater tanks, as well as tariff information, please visit www.capetown.gov.za/thinkwater

More information about the City’s Water Strategy can be found here: https://www.capetown.gov.za/general/cape-town-water-strategy

Frequently asked questions and answers with Alderman Xanthea Limberg:

1. Now that the dam levels are increasing, can the City reduce the water tariffs?

A reduction in tariffs is being considered. While the dams are the fullest they have been since 2014, consumption is still significantly lower than before. Currently, the City is selling approximately 30% less water than before the drought, but is facing additional costs that come with increasing our resilience through additional water resources. It is important that the City covers its costs to ensure that the maintenance and augmentation programmes can be carried out. Should the amount of water we are selling increase significantly, this will be factored into the tariffs, but given the uncertain impact of climate change, it may not be wise to actively encourage such an approach at this stage.

The City is currently on Level 1 tariffs, which is the second lowest tariff level and it is considering whether to move to the lowest tariff, being the no restriction, water-wise tariff. That decision is based on how much water is likely to be sold. It costs the City more or less the same to run the system no matter how much water residents consume, so if residents consume more it creates potential for the average price per kilolitre to go down. 

The City does not budget for a profit from the sale of water and seeks to keep costs of service delivery as low as possible. The fixed/variable tariff model that the City uses is in place throughout South African municipalities due to the increased water security it allows.

2. What is the Fixed Basic Charge and why do we need to pay a fixed charge when the dam levels are increasing?

Please note:

• The Fixed Basic Charge is not a ‘drought levy’ or surcharge. A proposed ‘drought levy’ was considered at one point during the drought, but it was never approved and therefore not implemented.
• The Fixed Basic Charge is not ‘an additional tariff’ but it forms part of the total water tariff structure, and is calibrated to cover approximately 20-25% of the costs of running the system. If this charge were to be dropped, the consumptive portion of the tariff would need to be increased to compensate as income from the total tariff is used to cover the cost of water provision.

Prior to the drought, the tariff was based only on how much residents use. The drought revealed that if consumption dropped significantly (i.e. beyond levels we could have expected before the drought), it could also affect our long-term future by taking away resources for necessary maintenance of the water service, and disabling cross-subsidization of the poor.

As such, the City changed the tariff structure so that a fixed portion of the revenue necessary to run the system responsibly is guaranteed no matter how much water residents consume. This is a funding model that is used at all South African municipalities, and has the advantage of making the system more resilient to climate change.

3. Do other municipalities have fixed charges?
Yes, this fixed/variable tariff model is in place throughout South African municipalities.

4. Why don’t we get 6 kl free water per month per household anymore?

This was done in line with a circular from the National Treasury advising municipalities to consider the affordability and sustainability of universal free basic services. In Cape Town this is not sustainable, especially considering changes to consumption levels in recent years and the effect this has had on revenue funding the water and sanitation service. 

5. What is the City doing to make sure we don’t run out of water in the future?

The City’s Water Strategy, which was launched in February this year, seeks to ensure that there will be sufficient water for all in our future, and Cape Town will be more resilient to climate change and other shocks. It takes into account the important yet complex relationships between water, people, the economy and the environment. The City is committed to striving towards ambitious goals over and above its municipal mandate, which does not include building additional resilience as is envisaged in the Water Strategy. The drought showed us that sole reliance on surface water, via the Western Cape Water Supply System, was not sustainable as climate variability increases.

The strategy includes commitment to develop new, diverse supplies of water including groundwater, water reuse and desalinated water cost-effectively and timeously to increase resilience and substantially reduce the likelihood of severe water restrictions in future. Expected timelines for implementation are also contained therein. The City is committed to increasing supply by building affordable new capacity of approximately 300 million litres per day over the next 10 years, and in suitable increments thereafter, in a way that is adaptable and robust to changes in circumstances.

More information about the City’s Water Strategy can be found here: https://www.capetown.gov.za/general/cape-town-water-strategy

End

Published by:
City of Cape Town, Media Office