City Power has announced that its customers will see electricity tariffs increase by a hefty 12.72% starting Monday.
The price increase is aligned with Eskom’s tariff increase of 12.74%, which was effected on April 1.
Struggling to supply electricity
However, the electricity price rise comes as the city in recent weeks has been struggling to keep the lights on due to infrastructure challenges.
This is despite Eskom having announced that there has been no loadshedding for over a three-month period.
This increase is set to have a negative economic impact on electricity consumers and prices of goods and services, as it is more than double the country’s 2023 average annual inflation rate of 6%.
The city confirmed the increase on Friday, following an authorisation from the National Energy Regulator of South Africa (NERSA).
The Johannesburg Metro’s bulk electricity supplier, City Power, will begin enforcing the new price hike on Monday, July 1.
City Power stated that the regulatory body had granted the average increase in tariffs it had requested of 12.72%.
According to City Power, the cost of supply study’s results and the NERSA methodology both influenced the agreed rate increase.
Increase driven by costs of operation
City Power’s spokesperson, Isaac Mangena, said this comes after they gave serious thought to all the variables influencing our business and clients.
“Our tariffs are determined by several key factors, such as industry inflation driven by increases in bulk purchase costs, our operational cost and our cost structure,” said Mangena.
He added that the city’s tariff application to NERSA was in line with the consideration of the current economic conditions. This is where most of the residents are affected by the rising cost of living.
“The tariff adjudgments follow intensive consultation with residents, and stakeholders of Johannesburg during the recent Integrated Development Plan (IDP) consultations, and other regulated consultation processes before the application to NERSA was made.
Subsidising low-income earners
“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 for others may well be above the 12.72% threshold,” he added.
He stated that the utility will introduce a total basic charge of R200 to prepaid customers over the next three years. This is subject to them making a more suitable contribution to the cost of servicing the specific customer group.
“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 374kWh per month will pay an extra R49.17 for the same 374kWh, increasing the total charge from R791.57 to R840.74.”
In an effort to lessen the impact on this vulnerable customer group, said Mangena, the impoverished prepaid client will be put on a tariff exempt from service and capacity fees.
“Other customer categories will continue to subsidise the customer category in this regard. It is implied that when a client purchases electricity, the R200 will be collected upfront before any consumption-related charges. The complete basic price (R200) will be recovered from eligible prepaid consumers via the prepayment platform.
Hefty increase for high-energy users
“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.”
He said the residential low-income prepaid tariff will only be available to registered indigent customers.
“City Power encourages customers who earn less than R6,000 monthly or have financial challenges to approach their nearest Service Delivery Centre (SDC) to make arrangements and register for the Expanded Social Package. Qualifying citizens in the city have access to free basic electricity (FBE).”
robbing the rich to supply the “poor”
It’s unfair to those who buys electricity there are lots of people who don’t buy electricity at all,they have access to heaters gissers it means we paying for those who bridge the electricity city power and escom they need to do their job making sure that they change all the boxes so that we buy electricity all of us me personally I’m not happy couz I buy electricity every month of the value of 1500