Civil society group Outa has written a formal objection to the City of Johannesburg’s proposal to include an additional monthly electricity charge.
The proposal is included in the city’s draft budget for 2021/22, and will see a fixed monthly service charge of R230 added to domestic prepaid bills. R460 will be added to the prepaid bills of businesses.
“It has been reported that the city plans to drop this proposed levy, but we have not seen any official confirmation of this,” Outa said.
“It’s the third year that the city has tried to add a monthly surcharge for prepaid electricity users. The previous attempts failed, as they should have. This attempt should fail too.
Outa said that the proposed costs are unreasonable, particularly as prepaid electricity is usually used by lower-income households and SMMEs. It added that the economic situation facing residents is extremely difficult, particularly after the pandemic lockdowns.
The city should produce a cost-of-supply study to motivate the need for such a charge. In the absence of such a study, we regard this charge as irrational and call for it to be reconsidered, said Brendan Slade, Outa legal project manager.
“For a household, the cost of buying 350kWh a month would increase from R596.17 to R913 (53%) with the new levy; even if the levy is removed, the power charge increase takes the bill to R683 (a 15% increase).
“Using 500kWh a month increases from R791.53 to R1,248.78 (58%); without the levy the increase is to R1,018.79 (29%). “These charges are unreasonable and unjustifiable, particularly in the lower blocks,” said Slade.
He added that the city’s draft budget documents are contradictory, with the prepaid surcharge included in two sets of tariff documents but not in the tariffs in the main Budget Book. This is confusing and gives the impression that the city wanted to establish this new charge without proper public oversight.
Slade said that there is also no way for the public to establish what City Power spends per kWh to provide the electricity service, as these costs are not clearly available. There is also no indication that the revenue from such surcharges would be ringfenced for clearly identified expenses, he said.
“The lack of transparency suggests the City of Joburg has an opportunistic approach to improve revenue to compensate for its declining financial situation,” said Slade.