JOHANNESBURG – The National Electricity Regulator of South Africa (NERSA) has granted City Power approval to implement a residential Time of Use Tariff system.
This 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.
This time-differentiated system, called the Time of Use Tariff, was previously made available to large power users. It will now also be available to residential users effective July 1.
In terms of this regulated pricing strategy, City Power 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 07:00 and 10:00 and 18:00 and 21:00.
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.
Sicelo Xulu, City Power Managing Director, 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 incentivising and rewarding them for changing their usage patterns, while at the same time ensuring security of supply by lessening the pressure on the grid. Load shedding is a fact of life that we have to contend with for the foreseeable future, and we need to explore any conceivable solutions to ensure that we keep the lights on,” explined Xulu.
Xulu further noted that the Time of Use Tariff system is designed to help the customers to reap noticeable savings, provided they amend their usage patterns. He said that the spike during peak times is largely caused by hot water consumption and cooking by residential customers between 17:30 and 20:30.
