Johannesburg – The cost of electricity is going up next week by more than 12 percent.
Announcing the hike on Friday City Power said from Monday, (1 July 2024), it will implement the new tariff increase approved by the National Energy Regulator of South Africa (NERSA).
City Power said in a statement the regulatory body “approved the average increase of 12.7 % of the tariffs” that it requested.
The approved tariff increase was informed by NERSA methodology and findings of the City Power cost of supply study.
“The increase was applied for after careful consideration of various factors affecting our operations and customers,” City Power said.
“Our approved average tariff increase of 12.72% does not mean every customer will experience the same increase as we have started to implement some of the findings of the cost of supply study.
“As a result, some customers will experience a slightly lower tariff increase while an increase to others may well be above the 12.72% threshold.
“For instance, the average increase to 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 374kWh per month will pay an extra R49.17 for the same 374kWh, increasing the total charge from R791.57 to R840.74.”
City Power explained that the customer will, however, for the first 350kWh per month pay R2.2162/kWh compared to R2.0967/kWh for the current financial year, which will be R41.83 more per month.
The next 24kWh will cost R65.06 which is R7.52 more than what it is costing now.
City Power said the residential prepaid low (indigent) tariff will continue to be based on the inclining block tariff methodology as prescribed by NERSA.
The applicable rate charged per kWh increases as actual monthly consumption exceeds the threshold for respective blocks, i.e. the threshold for block 1 is 350kWh, block 2 500kWh, and block 3 any monthly usage greater than 500kWh.
Monthly consumption up to 350kWh will be at R2.2162/kWh, the next 150kWh for the month at R2.7110/kWh, while any usage above 500kWh per month will be at a unit charge of R3.2261/kWh.
All the amounts are exclusive of VAT.
The residential prepaid customer is currently on the lowest tariff that does not even attract any form of a basic charge.
City Power said the residential prepaid customer does not adequately contribute to the fixed network operating cost, the cost attributed to repairing and maintaining the network to ensure availability on demand.
City Power said over the next few years it will gradually subject the prepaid customer to a more appropriate contribution to the cost of supplying the particular customer category with the introduction of a total basic charge of R200.
This consists of a R70 service charge and R130 network capacity charge before consideration of VAT.
The indigent prepaid customer will be placed on a tariff that does not attract service and capacity charges, as a measure of cushioning the particular customer category due to its vulnerability.
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.
However, should the customer at the beginning of the month purchase electricity for less than R400, the payment will be split between covering the fixed charge and charges for consumption of electricity to ensure that the customer gets some kWh with every purchase until the minimum purchase threshold of R400 is reached.
It will however not be possible to accumulate non-payment of the total basic charge beyond one calendar month.
In other words, should a customer on the first day want to buy electricity for the first time in the month with R300, R40 will be set aside for VAT the balance of R260 will be split 50/50 between covering the fixed charge (R130), and the remainder R130 towards purchasing kWh’s.
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.
The customer will however for the first 350kWh per month pay R2.3634/kWh compared to R2,0967/kWh for the current financial year, which will be R93.35 more per month per kWh.
The next 150kWh will cost R406.65 which is 45.89 more than what it is costing now.
Any usage above 500kWh a month will cost the customer R3.0891/kWh.
The residential prepaid high tariff will otherwise continue to be based on the inclining block tariff methodology as prescribed by NERSA. All the amounts are exclusive of VAT.
The residential low indigent prepaid tariff will only be available to registered indigent customers.
City Power said it encourages customers who earn less than R6 000 monthly or have financial challenges to approach their nearest Service Delivery Centre (SDC) or the City of Johannesburg regional walk-in centres to make arrangements and register for the Expanded Social Package.
(ESP) rebates.
Qualifying citizens in the City have access to Free Basic Electricity (FBE).
Only indigent citizens qualify for FBE and the programme is solely intended to assist them.
City Power said “in its operations” it always strives to ensure that electricity was available and affordable for our customers who are already buckling under tough economic conditions.
