Brace yourself for tariff increase starting this July
City Power says prepaid customers will now pay an extra R200 excluding VAT for service.
After careful consideration and extensive consultation with residents and stakeholders in Johannesburg, service provider City Power says the current 12.72% tariff increase will not affect every customer.
City Power has, effective from July 1, implemented the new tariff increases as approved by the National Energy Regulator of South Africa, and these structures and levels are reviewed annually to determine the changes in the price of electricity for residents.
According to a statement sent to the Roodepoort Record by City Power spokesperson Isaac Mangena, prepaid customers will now be subject to the R200 charge to bridge the fixed network operating cost gap. This is because currently, residential customers do not effectively contribute to the costs of repairing and maintaining the network to ensure availability on demand, hence the implementation of the basic charge.
This charge consists of a R70 service charge and a R130 network capacity charge, exclusive of VAT. Tariffs will increase gradually over time, and residential customers who are currently not paying the basic charge will be introduced to this new charge in the coming years.
Mangena said the average tariff increase of 12.72% will not affect every customer; some customers will experience a slightly lower tariff increase, while an increase for others may well be above the 12.72% threshold.
“The average increase for a typical indigent customer was limited to 6.21% as they are the most vulnerable customer category. Therefore, the residential low-prepaid customer that consumes 374 kWh per month will pay an extra R49.17 for the same 374 kWh, increasing the total charge from R791.57 to R840.74.”
To lessen the impact on this vulnerable group, said Mangena, the impoverished prepaid client will be put on a tariff exempt from service and capacity fees.
“The customer category will, in this respect, therefore continue to be subsidised by other customer categories. The total basic charge [R200] will be recovered from the qualifying prepaid customers using the prepayment platform; this implies that when a customer purchases electricity, the R200 will be recovered upfront before any consumption-related charges.
“The residential high-prepaid customer that consumes 800kWh per month will pay some R443.81 more for the same 800kWh, increasing the total charge from R1 916.76 to R2 360.57.”
Mangena encouraged low-income customers to register for Expanded Social Package rebates and Free Basic Electricity at Service Delivery Centres or the City of Johannesburg regional walk-in centres.
