New City Power costs unpacked
City Power explains the much debated additional charge of R200 for prepaid customers and other increases of 12.7% as approved by the energy regulator Nersa.
As of July 1, residents will be paying increased tariffs across the board for City Power services.
The new tariff increase were approved by the National Energy Regulator of South Africa (NERSA) for an average increase of 12.72%.
While the utility does not operate to make a profit, it needs the additional funds to keep the ‘doors open’.
Spokesperson for City Power, Isaac Mangena said, “Our approved average tariff increase of 12.72% does not mean every customer will experience the same increase. Some customers will experience a slightly lower tariff increase while an increase to others may well be above the 12.72% threshold. The average increase to a typical indigent customer was limited to 6.21% as they are in the most vulnerable customer category.”
Residential normal prepaid customers who use 800kWh per month will pay some R443.81 more for the same 800kWh, increasing the total charge to from R1 916.76 to R2 360.57.
For many though the biggest surprise is a R200 monthly fee for pre-paid users.
This consists of a R70 service charge and a R130 network capacity charge that will be used for maintaining and improving the network.
“What the introduction of the surcharge now seeks to do, is to end the unfair subsidisation of prepaid customers by post-paid customers,” said Mayor Kabelo Gwamanda.
Nqobani Mzizi, Senior Manager in the revenue department concurred. “Prepaid users, unlike those using meters, have not been contributing towards our operational costs and network management. They were only paying for the electricity they used. This move is intended to level the field.”
He explained that compared to other municipalities, Johannesburg can charge less because the service charges are not included in the unit cost. “Others have this embedded in the price – we have split it because without doing that it would push the cost above the 12.72% that the regulator approved.”
The actual cost to consumers will be R230 – City Power has always published costs without the inclusion of VAT in a bid to simplify often complex tariff and budget documents.
“Prepaid users continue, however, to benefit from a low service and network charge compared to metered customers.”
Customers who qualify for indigent or other reductions in costs from the city, like pensioners, will not be charged this fee.
Indigent prepaid customers who consume 374kWh per month will pay an extra R49.10 – increasing the total charge from R791.57 to R840.74.
For those who do, the funds will be deducted from your first unit purchase of the month.
“However, should the customer at the beginning of the month purchase electricity for less than R400, the payment will be split to ensure that the customer gets some units with every purchase until the minimum purchase threshold of R400 is reached.”
Mzizi urges customers to plan their budgets accordingly if this new prepaid R200 charge or other general increases affect them significantly. “Unfortunately, these costs are not going to be withdrawn and we implore consumers to plan appropriately.”
If anyone would like to learn more or clarify anything to the increases they are encouraged to call City Power on 011 490 7000.
