While Joburg residents are grappling with load reduction, they will feel a financial pinch as tariffs took a 12.7% increase, yesterday.
Tariff increases were approved by the National Energy Regulator of South Africa (Nersa) as requested by City Power.
According to City Power’s spokesperson, Isaac Mangena, the new tariff increases were implemented due to various reasons affecting operations and customers. Tariffs were determined by key factors, such as operational cost, cost structure and inflation driven by an increase in bulk purchase cost.
City Power’s application for tariff increase was inclusive of all social classes, considering customers are financially stretched but at the same time, ensuring sustainable energy is supplied, Mangena said.
“As a result, the tariff adjustments follow intensive consultation with residents and stakeholders of Joburg during the recent Integrated Development Plan (IDP) consultations, and other regulated consultation processes before the application to Nersa was made,” Mangena said.
An accommodative tariff hike, meant giving indigent customers a slight increase instead of the approved 12.7%.
“Some customers will experience a slightly lower tariff increase, while an increase to others may well be above the 12.7% threshold. The average increase to a typical indigent customer was limited to 6.21% as they are the most vulnerable customer category,” Mangena said.
Mangena said indigent customers using prepaid electricity will experience a tariff increase by charging them R200 since mostly are economically disadvantaged.
“The residential prepaid customer is currently on the lowest tariff that does not even attract any form of a basic charge. 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.
“The customer category will therefore continue to be subsided by other customer categories. The total basic charge, R200, will be recovered from 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 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,” Mangena said.
Speaking to Eyewitness News (EWN), City Power’s General Manager for Tariffs, Frank Hinda, said that previously, the prepaid structure was not designed to charge customers and this has since proven to be unsustainable.
Hinda said the R200 will be deducted when customers purchase electricity.
He said: “You take the R200 and split it into two, the R100 will be used for the basic charges and the other R100 you will be getting kilowatt hours, which will approximately 16kW, 17KW or 18KW around there. When you come back again with R100, we will split it into two, R50 will go to the services and R50 for consumption,’’ he told EWN.
He said if the monthly fee is not paid, the debt will carry over to the next month.
The low tariff increase is only applicable to registered indigent prepaid customers, earning less than R6 000 monthly, or are financially challenged.
They can register for the Expanded Social Package rebates at their nearest service delivery centre (SDC) or City of Joburg.
The Star