Prepaid electricity users will only have tariff increase to fork out for now after City Power suspended the fixed surcharge initially planned for the current financial year.
Residential prepaid users were due to pay R200 and business prepaid users R402 surcharge from the beginning of July this year. However, the entity suspended the implementation of the surcharges following consultations with stakeholders.
According to spokesperson for City Power, Isaac Mangena the entity was trying to put balance between prepaid and conventional electricity users who are paying a fixed surcharge for maintenance, operational and refurbishment of infrastructure charged on their monthly statements which excludes tariffs.
“A prepaid customer does not pay basic charges but pays only the tariff, therefore electricity is cheaper for a prepaid customer compared to a conventional customer hence the City of Johannesburg wanted to address the disparity,” said Mangena.
He added that City Power has taken a decision to implement the reduction of residential prepaid blocks from five to three during the current financial year tariff cycle as part of a process of alignment between the conventional and prepaid tariffs. “There is an anomaly in the manner in which the prepaid tariffs are currently structured. Due to this anomaly, the residential prepaid tariff was historically cheaper than the conventional tariff.”
Mangena said prepaid users do not contribute to maintenance, operation and refurbishment of the infrastructure to ensure continued availability of electricity supply on demand. “The residential prepaid customer has the benefit of having electricity availability on demand while not paying for it.
“This is the anomaly the City of Johannesburg seeks to eradicate so as to equalise the costs between a residential prepaid customer and a residential postpaid customer.”
He said the general intended advantage for a customer to be on prepaid tariff is to give a customer added ability to manage their electricity consumption more efficiently. “It is therefore an anomaly for a residential prepaid customer to enjoy much cheaper electricity simply by choosing to be on the prepaid platform at the expense of the utility and its ability to ensure availability of supply on demand.”
The suspension of the surcharges was done to allow further consultation on how best to achieve further alignment between a prepaid and conventional consumption and in what time frames.
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