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Surcharge meant to ‘align post-paid electricity with prepaid electricity’

Further details about the surcharge will be shared ‘at a later stage’, and vulnerable households can apply for staggered debt relief.

NOMPU SIZIBA: The Johannesburg City Council has reversed a R200 surcharge they were planning to levy against prepaid electricity users. To tell us about the municipal charges and how they work, I’m joined on the line by Kgamanyane Maphologela, a director of communications and stakeholder management at the City of Joburg. Thanks very much for joining us, sir.

The new municipal rates kicked in on July 1. How much more, in percentage terms, are Joburgers having to pay for electricity relative to last year?

Read: City of Joburg quietly reverses new prepaid surcharge

KGAMANYANE STAN MAPHOLOGELA: Thank you for the opportunity. The City of Johannesburg actually has already adopted and approved tariffs for 2019/20. The official tariff increase for the city comes into effect on July 1, 2019. For property rates it’s 5.5%, for electricity it’s 13.7%, for refuse removal it’s 7%, and for water it’s 9.9%.

NOMPU SIZIBA: Tell us about the new rule, which says that if a household consumes above 500 kWh a month, they will have to pay a punitive rate. Just tell us about that.

KGAMANYANE STAN MAPHOLOGELA: I think we need to put our position very clearly in regard to that. Yes, it did appear that customers were going to be charged or the city is going to implement a fixed surcharge for prepaid electricity, even though that is in the country report. The city has since reviewed that; the fixed surcharge of R200 per month for residential customers, and so too for business customers, will be suspended with immediate effect. We realise as the City of Johannesburg that consumers are already burdened by increasing the rates pressure, pressure on households’ disposable income, and even the economy is not actually right at the moment. The current sluggish economy. As a result of that, the city actually has suspended – if not actually offered any relief on prepaid electricity customers.

Therefore R200 for residential has since been suspended in the City of Johannesburg.

NOMPU SIZIBA: Since you have now come to that particular topic, why was that surcharge introduced in the first place, and would it have been in line with the tariffs that were approved by Nersa?

KGAMANYANE STAN MAPHOLOGELA:  This was still subject to approval by Nersa. I think the main purpose of the surcharge for the City of Johannesburg, was to try and charge customers for availability in terms of the infrastructure for electricity. But that has however been reviewed and has been suspended for now. The main important thing as well was to try and align the post-paid electricity with the prepaid electricity. Now, as the City of Johannesburg, I think we have decided to suspend that until all stakeholders are engaged on the issue.

NOMPU SIZIBA: I’m just trying to understand the logic and the fairness of levying that R200 surcharge on people who are paying prepaid electricity. I know that when I decided to move from being a standard person with a meter outside, and move towards prepaid, I had to pay the city council about R2 000 or whatever it was in order to get that prepaid thing. And then of course I want to control what I spend per month or per week on my electricity. Then you guys were planning on lobbing an extra R200 surcharge at the end of each month, regardless of people’s consumption.

KGAMANYANE STAN MAPHOLOGELA: As I indicated, I don’t want to go much on something that has been put on review. We are aware that in the council’s report which was adopted by council that R200 fixed charge is still there, and so too for business.

But, now the city has taken a position to review that, and I think further details on that surcharge will be shared with all impacted stakeholders at a later stage. That obviously must be subjected to a process of public participation, because it was never actually taken through to a process of public participation. I think as a city we actually put in detail this narrative why this R200 has be charged. But, for now, I don’t want to dwell much on that because it’s a process which has to still go for public participation and discussion. So, we can put a narrative whether this thing should continue or not continue.

I think as a city we’ve had words with customers through submissions made during public meetings, that while we consider the tariffs to be cost-reflective, we cannot ignore the calls for relief by our residents.

NOMPU SIZIBA: Understood.

KGAMANYANE STAN MAPHOLOGELA: Now, following that significant consultation I think as the city we have addressed some of the issues to increase internal efficiencies and pass this benefit on to customers.

NOMPU SIZIBA: The just lastly, what’s going to happen? You’ve indicated that you are aware that consumers and people who own properties and rent properties are under financial pressure. And of course these rate increases are fairly substantial, particularly for the electricity. What sort of leeway do you give to people if they are behind in terms of paying, particularly those who are not on the prepaid type of format?

KGAMANYANE STAN MAPHOLOGELA: As the city I think we remain cognisant of the tight economic times, and we are fully aware that residents have struggled to keep up with their municipal rates and services accounts. Now, in an effort to deal with these challenges, the city does provide relief to the most vulnerable customers already with a basket of rebates for rates and services under what is our expanded social programme.

But over and above that, I think as the city we will be implementing a debt rehabilitation programme. The broad concept of the programme hinges on an application process that will allow strained households to apply for manageable debt rehabilitation, meaning that customers who qualify will receive immediate relief through 50% of the debt write-off. If the customer complies with all the requirements of the programme, which includes keeping their current account up to date, or allowing for regular inspection of meter services, then the remaining outstanding debt will be written off over a period of three years.

But during August the city will be embarking on a city-wide educational roadshow about the debt rehabilitation process or the application process.

NOMPU SIZIBA: Okay. Thank you very much for your time, Kgamanyane.

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On prepaid. Check the official rate and what you are paying. In some areas the tariff is already R2 plus per kw never mind the power used. The re sellers are raking in.

Whatever ‘relief’ is offered – its too late. The consumer is dying a slow death trying to survive a corrupt system.

Where there is smoke there is fire. Prepare for the worst.

Maybe he should have told us when properties will be re valued as prices have dropped significantly. Then the appropriate reductions in Rates and Taxes should be given through to consumers and maybe even backdated.

This is going to get a lot worse.

DA, ANC EFF does not matter. They are all the same.

Please answer two simple questions:

What are they doing about the free electricity supplied to the townships around Johannesburg?

What are doing about all the illegal connections to the electricity network?

It should be relatively simple to calculate what the blended average rate is in postpaid residential, and make the prepaid that much per kWh.

Eg if the average of 100,000 households is they pay R300 in availability (the Amp connection fee plus admin fee) and R700 In energy charges (the kWh fees) for an average of say 500 units then voila : prepaid should be R2 per kWh.

If prepaid stays cheap a guy in a mansion paying huge availability fees should be converting. Every runt council loses is a runt they will get from the rest of the residents.

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