Good news for Joburg prepaid electricity users – with a big catch

Update: This article has been updated to reflect the City of Joburg’s new position on the prepaid charges.

Executive Mayor of the City of Joburg, Dada Morero, has announced that the city will withdraw the 2025/2026 budget, the City Power tariff, and the Draft Property Rates reports and put forward new proposals.

This comes after the mayor considered the initial proposals and the impact they would have on the city’s residents, particularly with water and electricity charges

Among the initial proposals was a R70 hike in service charges for prepaid electricity users in the city, taking the controversial tax to R270 per month.

Under a new proposal, these charges will remain unchanged at R200 a month (before VAT), Morero said.

The renewed proposals on charges include:

• The proposed 5.6% increase in property rates be adjusted to 4.6%, in line with CPI.
• The rebate threshold will remain at R300,000, rejecting the initial proposal to lower it to R200,000.
• No increases to availability charges for both prepaid and conventional meters (R200 and R930, respectively).

Morero said that the new proposal also retains the 6kl free water for all residents—something that was removed in the initial proposals.

“As we continue this process with the upcoming public participation meetings towards finalising the 2025/2026 Budget, we urge residents and businesses to be mindful of their water and electricity consumption; and to remain committed to paying municipal accounts, as these payments help us improve basic services,” the mayor said.

The zero increase to availability charges for prepaid electricity will be a relief to Joburg residents who were subjected to the tax from July 2024.

The city introduced the R200 service and capacity charge to prepaid electricity bills in 2024 and received wide backlash from households.

To accommodate the charge, the city split prepaid users into two categories, ‘high’ and ‘low’ users.

Low users represent indigent households, who are exempt from the charge. The high users are all other prepaid users.

At the time, the city said it planned to increase these charges further in the coming years.

When the charge kicked in on 1 July 2024, many prepaid electricity users found that the R200 charge was deducted immediately on the first recharge of the month, leaving them with far fewer units than anticipated.

Following widespread public and political backlash, Morero said the charge would be reviewed.

While Morero conceded that the charge would not be going away, he said the city had committed to reviewing the amounts being charged, given its impact on residents in the city.

Even with no increase to the charge for 2025, residents will still be paying more for electricity, as the city increases its tariffs to align with Eskom’s tariff hikes.

Joburg power utility City Power’s Integrated Development Plan for 2025/26 shows the following proposed increases:

The City of Joburg has not yet published the updated tariff proposals for 2025/26, but councillors have widely published the figures, including the DA.

DA councillor in Joburg, Chris Santana, said that the city’s proposed increases are tone-deaf and unjustified, given the city’s state.

“These above-inflation hikes will plunge residents deeper into financial distress while service delivery continues to deteriorate,” he said.

“These increases are unjustified while residents still endure frequent water outages, load-shedding, uncollected waste, and unaffordable bills based on estimated readings.”

The city previously justified the prepaid charge by saying that it was necessary for prepaid users to pay their fair share of maintaining the local grid.

While prepaid users only pay for the electricity they use, they remain connected to the grid and expect electricity on demand.

This means that the infrastructure has to ensure that capacity is available, which comes at a cost.

City Power chief executive Tshifularo Mashava later clarified that the capacity charge is aimed at “affluent” customers and residents in affluent areas.

She told the Joburg Chamber of Commerce earlier this year that “lots of customers” in these areas had moved to prepaid metering specifically to avoid paying maintenance charges.

These charges currently sit at around R1,000 per month for post-paid customers.

By pushing the capacity charges onto these more affluent prepaid customers, the city can ensure that they still contribute to essential charges and maintenance, while subsidising poorer households.