Massive R550 prepaid electricity charge for Joburg – City Power clarifies proposal

 ·23 Apr 2024

City of Joburg power utility City Power has refuted claims by the Democratic Alliance (DA) that it would be charging prepaid electricity users R554 a month on top of an 18.84% increase in electricity tariffs from July this year.

The utility said that no tariff hikes have been approved and public consultations are still ongoing but confirmed that it wants to restructure prepaid charges and bring ‘regular’ prepaid users in line with conventional residential tariffs.

The R554 claim followed the tabling of the City of Joburg’s budget in March 2024, where the DA laid out the proposed rate hikes for the coming financial year.

Based on the budget, proposed tariff increases are as follows:

  • Rates: +4.8%
  • Electricity: +11.3%
  • Water: +7.7%
  • Sewer: +7.7%
  • Pikitup: +5.9%
  • City Power Service & Capacity Charges: +16.74%.

For prepaid users, the city plans to split prepaid electricity charges into two categories – low users and high users – with separate tariff hikes for each:

  • Low Users (indigent customers): +6.36%
  • High Users (regular customers): +18.84%

In addition to the rate hikes, the DA said that ‘high’ prepaid users will also pay R244 Service Charge plus a R237 Capacity Charge, adding up to a R554 charge when including VAT.

City Power hits back

News of these steep charges caused significant upset among Joburg residents, who have directed their ire towards the city’s power utility.

City Power, however, has denied that it will implement the stated rate hikes and service and capacity charges for prepaid users—at least at the rates mentioned.

The utility said that the public consultation process on the 2024/2025 tariff changes is still ongoing, and “no decision will be made without residents of Johannesburg, particularly City Power customers, making their inputs”.

“The customer and stakeholder engagement process, which has already commenced through the Integrated Development Plan (IDP) and other regulated consultation processes, will discuss the proposed 12.72% tariff increase that will come into effect in July if approved,” it said.

“From those discussions, a decision will be tabled at the Johannesburg City Council, taking into account the interest of the customers and the inflation in operational expenses.

“It is important to emphasise that City Power has not reached that stage yet, and any suggestion that seeks to claim that we have is false and unfounded.”

The Joburg power utility said that other external factors are also at play, such as the fact that the Nersa municipal tariff increase for FY24/25 has still not been determined.

New structure

However, the utility did confirm the proposed restructuring of prepaid users into two segments (low/high).

In this proposal, low customers will be exempt from paying both service and capacity charges to cushion indigent customers from the current economic climate.

“This is to ensure that tariff remains targeted at the low-use indigent customer,” City Power said.

High customers, meanwhile, will have to start contributing to the service and network operating and maintenance cost to “gradually align to the tariff applicable to the residential conventional tariff”.

So, while the utility is denying the R554 charge specifically mentioned by the DA, indications are that additional charges are coming; they’re just not yet approved or set.

“Once the necessary processes have been concluded and a decision has been made, City Power will inform customers on the implications of the changes which are necessary for the sustainability of the utility and its ability to continue providing improved services,” it said.

Read: The rate hikes hitting South African property owners soon – Cape Town vs Durban vs JHB and more

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