Deal with it: Joburg warns residents to expect higher bills

The City of Johannesburg has warned property owners to prepare for increases on their July municipal bills because of the annual tariff increases for water, electricity, property rates, refuse and sanitation.

The following new tariffs, which were approved by the City’s Council in May 2024, will start to reflect on municipal account statements at the end of July 2024.

• Property rates will increase by 3.8%,
• Electricity by 12.7%,
• Refuse by 5.9%,
• Water and sanitation by 7.7%.

It also finally made a public declaration about its new prepaid surcharges, saying that prepaid customers will now pay a fixed charged of R200 (excluding VAT), which they will pay every month when purchasing electricity.

The R200 charge, which amounts to R230 after tax and around R2,800 per year, has already kicked in, with many residents in the city expressing shock at the sudden charge.

The charge has been flagged by the media for months, from back when it was R550 per month before being cut to R230 ahead of budget approvals.

Nevertheless, residents would have been caught by surprise while charging up with power from the start of the week (1 June), when the new service fee was immediately deducted from money paid, delivering fewer units than expected.

Kgamanyane Maphologela, Group Finance’s Director for Communications and Stakeholder Engagement said residents and businesses will just have to prepare for the increases.

“We urge all our residents and stakeholders to note the approved annual increases for municipal services and prepare accordingly. The significant charges on their municipal bills will be noticed in their July municipal bills following the implementation of the new tariffs,” said Maphologela.

Maphologela said the tariff hikes have been influenced by the underlying costs of providing services, including the bulk input purchased and the infrastructure to transport such input, including cost recovery, maintenance of infrastructure and repairs.

Regarding the prepaid surcharge, he said this has been implemented to “level the ground” between postpaid and prepaid customers and “ensure that all residents contribute towards maintaining the electricity infrastructure to ensure the City continues to deliver electricity supply”.

Backlash

Civil action groups, energy experts and energy businesses have hit out at the new charge, noting that the pathway to implementing the additional ‘tax’ has been littered with a lack of consultation, communication and consideration.

The first major issue that arises is that the prepaid tariff will impact almost all prepaid users—even those it should not.

This is because, even though indigent households are exempt from the charge and should get electricity at a lower rate, the city’s indigent register does not match up with the number of households who should qualify.

“While the City may have the executive powers to apply service charges, this R200 fixed service charge on prepaid was poorly publicised, badly implemented and pushed through with little to no consideration of the consequences,” said Julia Fish, Manager of JoburgCAN, which is an initiative of civil action group Outa.

Outa the service charge will result in an above 100% increase in electricity costs for low-consumption households, while tokens do not include vital information such as how much money was allocated to the charge, to VAT and to actual electricity units.

“The lack of transparency does not meet mandatory regulation compliance,” it said. The group called on the city to scrap the surcharges and to find alternatives.

Service issue

Another massive issue that has been flagged is that the city has implemented the rate hikes and service charges at a time it is not fully providing the services at all.

Rein Snoeck Henkemans, Managing Director of Alumo Energy, noted that the tariff hikes are kicking in when the City of Joburg is implementing load rotation—which he describes as a localised version load shedding.

“Claims that this move was necessary due to increased electricity usage during the winter months seem disingenuous,” he said, adding that winter comes every year, so the city should have made plans to meet the added demand long before.

As the city hikes rates and cuts its actual service provision, South African households are being forced to pay even more and drastically reduce their spending on the basics due to persistently high inflation and interest rates.

He said the prepaid service charge is likely to deliver an extra R50 million a month to the city at the expense of residents, which he said reeks of opportunism, given the lack of consultation and communication it came with.

Read: The new R2,800 prepaid electricity ‘tax’ you can’t escapeRead: