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City of Joburg quietly reverses new prepaid surcharge

Fixed R200 charge disappears within a week …

The City of Joburg has quietly reversed a R200 per month municipal surcharge for prepaid electricity customers that came into effect on July 1. The surcharge was to have been added to municipal rates bills this month, meaning that residential users would not see what is effectively a substantial increase in the cost of electricity until the end of the month.

The schedule of approved tariffs for 2019/2020 on City Power’s website still contains the details of the surcharge as of Monday morning.

Read: Joburg’s prepaid electricity tariff shock

However, a different, summarised schedule of tariffs on the city’s website (labelled “Draft Tariff Reports”) contains no mention of the surcharge. This schedule, on which the surcharge no longer appears, is said to have been approved by the municipality on Friday. This, despite the fact that new tariffs kicked in on Monday.

The updated tariff document, which has been made available in PDF format on the city’s website, was created on Friday.

It is not clear whether or not the surcharge formed part of the tariffs approved by the National Energy Regulator of South Africa (Nersa), which has not yet published its approved municipal tariffs for the new financial year (from July 1).

The implementation of this municipal surcharge caught many by surprise as it was not included in the draft budget book or City Power tariffs document, both of which were tabled in March.

In his note to residents, Ward 117 councillor Tim Truluck states that the surcharge then “appeared in the 2019/20 budget book that was tabled for the budget in late May. It appears nobody noticed them then and they were passed by council”.

He adds that he is not certain whether these changes were “tabled at the Environment and Infrastructure Services (EISD) Section 79 Oversight Committee”. He notes that he sits on the committee and was unaware of the changes.

“I have asked the chair of this committee to investigate these increases. I have also asked the MMCs of EISD and Finance to look into how these charges were implemented without any public or prior consultation.”

While residents who use prepaid electricity will breathe a sigh of relief, it is not clear how City Power is going to meet its objective of better aligning the residential prepaid tariff to the residential conventional tariff. Those credit users who are on the conventional (‘normal’) tariff already pay two fixed monthly charges: a service charge and a capacity charge. From July 1, this ranges between R631.17 and R805.41 per month (including VAT), depending on supply and phase usage.

Without the municipal surcharge, residential prepaid users still face fairly steep increases in tariffs given the introduction of new tiers in City Power’s tariff structure. Those users who consume more than 350 kilowatt hours in a month will see a significant jump in pricing (previously, consumption of up to 500kWh a month was at the same tariff).

2018/2019 blocks

c/kWh

2019/2020 blocks

c/kWh

Change

0-500kWh

124.49

0-350kWh

139.42

12%

351-500kWh

159.92

28.5%

500-100kWh

141.43

>500kWh

182.23

28.9%

Any consumption above 500kWh is also subject to a network surcharge of 6c/kWh.

Hilton Tarrant works at YFM. He can still be contacted at hilton@moneyweb.co.za.

 

 

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DA = ANC Lite.

The DA inherited the ‘heavy’ of ANC corruption and mismanagement built over 23 years.

What would you say if the ANC blamed the previous administration? Or apartheid?

Nonsense. Seems pretty clear to me, prepaid users are underpaying because they are avoiding the demand charge. That is not a made up cost by City Power, Eskom will charge City Power a demand charge that it will be subdivide across it’s customers in line with peak demand.

It therefore makes sense that prepaid guys have bigger increases to close that gap, doing it based on a per unit basis is a dumb way to go about it though, a surcharge would actually make a lot more sense.

My experience with pre-paid in an apartment was that there was a fixed fee plus usage. It was below R100 pm.

There never seems to be a shortage of excuses every time the DA CoCT up…

The DA is as useless as the ANC. Check Joburg CBD. Just like the ANC blames apartheid for it’s failure to deliver, the DA blames the ANC. Mashaba promised to turn Joburg around in 3 months when he took power…now 3 years later and Joburg STILL looks like a dump with massive service increases (check you COJ statements).

I am finished voting. All the parties can go S**EW themselves.

So let’s summarize this: voters for the 2 biggest parties are really between a rock and a hard place. Vote for the ANC, and the cadres will steal your rates and taxes, 100% guaranteed. Vote for the DA, and not only will its EFF partners steal some of your rates and taxes, but you can expect heavy increases in your municipal bills. Try to get off the grid, and the Solar Panel Commissars will come and intimidate you to register your green energy devices, so that they can tax these too.

So you can either have your taxes stolen (ANC) or increased exponentially (DA). No wonder people are fleeing the failed SA state in droves.

Because no party can fix the elephant, which is that the majority of people are too poor to pay for anything.

Haah, ja Julius said democracy is very, very expensive!!

DA facilitating the EFF is just epic.. retarded self serving politics, the righteous SA DA ‘politkus’

The City of Joburg has been quietly writing off massive accumulated debt from non payers of rates and consumables after they discover that the debt is 99% unrecoverable.

There are very few products that cost more if you buy more?? This is socialist economics.

Many thanks Hilton, for spotlighting this issue and thus the eventual reversal, otherwise we really had been screwed over big time. You are really the people’s champion! Cheers.

So a prepaid residential that uses 750kWh pays R1,183
and a postpaid residential with 750 kWh pays R1,604
for the same energy.

Well, in one case (prepaid) they get their money up front before usage, no staff and effort needed to chase defaulters, no staff needed for disconnections and reconnections, the other case (postpaid) they have to wait for their money and all the other costs mentioned.

If the figures are correct, then I believe the difference relative to the net additional costs is disproportional. In fact “they” should wake up and encourage pre-paid for efficiency’s sake. Everyone can buy pre-paid air time for cell phones so topping up prepaid should be just as simple. Bad debts and lazy administration gone! Cheaper data should be built into that deal.

Best to prepare for the worst case scenario. Where there is smoke there is fire.

These guys need to understand that continuously fleecing the middle class has a cost.

Example.

DSTV lost 100 000 premium viewers in the last financial year as it is an expensive luxury. Can they continue paying all their staff? Not sure.

As a recent customer to prepaid pls could someone in the know tell me…and I have tried to research this.

I buy electricity through the FNB app

– is it cheaper to buy per block for example if I need 900kWh do I buy 350, then 150 or if I buy 900 will it average the price across the thresholds?
– Does the prepaid cost per kWh above include VAT?

I know to buy only from the 1st but when I bought 800 kWh on 1st July the average cost per kWh including VAT and a small service fee was R1.8603

Who was responsible for this sneaky SERIOUS COST to the tax payers??????? “You’re FIRED!” D. Trump

Electricity and water costs in SA are now as expensive as in London and New York ( based on a household of 2 ) as are the cost of groceries/food ( apart from meat) medical services, private education and tax %. Security and motor vehicles cost more in SA than in other first world countries….but we DO have great weather!
Makes one think, doesn’t it!

Not quite, healthcare is largely free in the UK (for citizens) whilst significantly more expensive in the US. But the rate at which other expenses are reaching parity with the more developed world is alarming.

Electricity is energy…
It should be treated like petrol, diesel and illuminating Paraffin, it should be prepaid and all misunderstandings will die down. If you don’t fill up your tank the car stops…no service delivery protests no Eskom being owed R18 billion… lets just go prepaid.

To be clear : the proposed new “Municipal Surcharges” would have been levied at a rate of R200 for residential customers and R402 for business customers. The latter charge was touched on only very briefly by the erstwhile CoJ “direcor of communications”. It is not at all clear whether the repeal of these surcharges is temporary or permanent, but the attempt – and the underlying agenda – is clear to see.

The practise of adding in these insidious “surcharges” is becoming more widespread among several municipalities. To my mind, it is simply a disingenuous way of boosting revenue by adding tariff components which do not form part of the set on which NERSA regulates or even deliberates upon. (Cape Town has a similar 24c/kWh surcharge)

The attempted application of such a massive surcharge (R200) to residential prepayment customers – which includes those of very limited means – is particularly despicable. This is on top of the “collapsed” Inclining Block Tariff (IBT) tariff structure – from 5 bands down to 3 – which will already push prepayment consumers into higher tariff bands. As regards protecting the “poorest of the poor” : What on earth is the City thinking ???

Compounding the mis-communication – conveniently? – are the numerous disjoints between tariff schedules released by CoJ itself, Jo’burg Water and City Power. Some of the “stealth” tariff components on which there is very little clarity or harmony between schedules from the three divisions include :

* The so-called “Network Surcharge” of 6c/kWh which is levied on residential electricity consumption above 500kWh/month and on ALL business electricity consumption. This surcharge is not recognised or regulated by NERSA, and on an average electricity price of (say) R1.80/kWh, it is a significant component (close to 3%). The stated purpose of this surcharge is far from clear and one has to wonder how it is actually used.

* The so-called “Business Surcharges”, which are levied on business accounts for consumption of electricity, water and sewerage at a level of 2%. Last year, the business surcharge on water was dropped to 1%, but this year it has quietly reverted to the 2% level.

* The two new “Municipal Surcharges” of R200 and R402 on business electricity accounts. These charges would have been debited to the owners’ rates accounts, not electricity account. (strange recovery method, isn’t it ? Make you think)

* The “Water Demand Management Levy” (currently R24.88/month for residential consumers) which was originally touted as being an accrual for a water scarcity charge that MIGHT have been raised by Rand Water. Reading this year’s tariff schedules, it is quietly becoming just another fixed charge.

One wonders how CoJ manages to slip these increases under the radar whilst similar attempts in Tshwane – including a simialr R200/month fixed charge on residential electricity accounts – were met with a massive public outcry.

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