Sicelo Xulu, City Power managing director, said the approval to implement a residential time of use tariff system will allow the utility to price electricity at different rates during the day to encourage consumption during off-peak hours in order to reduce the cost to supply and lessen the pressure on the national grid. “The objective is to improve the continuity of supply and pass the savings on to consumers,” Xulu said.
He said the time-differentiated system, called the ‘Time of Use Tariff’ was previously made available to large power users and will now also be available to residential users effective from 1 July. Xulu said in terms of this regulated pricing strategy, the entity will charge for consumption of electricity at a low tariff during off-peak hours and at a regulated premium during peak periods.
The peak period falls on weekdays between 7am to 10am and 6pm to 9pm. Through the implementation of this system, City Power and the City of Johannesburg seek to safeguard security of supply by driving heavy use of power to off-peak periods. The off-peak price will be lower than what the current flat rates are, which will provide an incentive to consumers for using electricity during off-peak periods when tariffs are lower.
Xulu, City Power said the introduction of the ‘Time of Use Tariff’ is indicative of City Power’s commitment to help augment the security of supply and provide a means by which much-needed savings to consumers can be realised. “City Power’s introduction of a time-based tariff system is informed by its commitment to provide services to its hard-pressed consumers by… rewarding them for changing their usage patterns while at the same time ensuring security of supply by lessening the pressure on the grid,” Xulu said.
He said load shedding is a fact of life that people have to contend with for the foreseeable future and that people needed to explore any conceivable solutions to ensure that they keep the lights on.
He said that the time of use tariff system was designed to help the customers to reap noticeable savings provided they amend their usage patterns. He also noted that the spike during peak times is largely caused by hot water consumption and cooking by residential customers between 5pm and 8.30am. Xulu promised an extensive educational drive to educate consumers about the new system before it is implemented. City Power has to complete the roll-out of smart meters around Johannesburg before it could implement the new system. Eskom is also expected to increase its tariffs by more than 8 percent in the next four years to fund its infrastructure backlog.
