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How much electricity R1k, R2k will buy you in SA’s biggest metros

Comparison of tariffs reveals who is paying the most.
Joburg postpaid customers pay among the most across metros, while its prepaid customers pay among the least. Image: Moneyweb

An increase of 31% in fixed charges levied by Johannesburg’s City Power for electricity over the last two years means that postpaid (credit) customers now don’t even get 100 kilowatt hours (kWh) of usage for R1 000. Less than 100kWh is an astonishingly low amount.

The two fixed monthly charges – a network charge and capacity charge – totalled R631.16 including value-added tax (Vat) per month in 2019/20. Today, they total R825.32. This is charged by the metro’s utility regardless of how much electricity is consumed.

An analysis by Moneyweb in 2019 revealed that Joburg residents who are serviced by City Power and are not on prepaid continued to pay the most for electricity among the country’s major metros.

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But, comparing the cost of power at just R1 000 in spending is not entirely fair. A comparison of the amount of electricity received for R2 000 in spending removes the distortion of those high fixed charges is somewhat removed.

But at that level, customers in Joburg continue to receive the lowest amount of electricity across major metros.

Apples-with-apples comparison all but impossible

The way tariffs are designed across the various metros differs greatly:

  • Some have fixed charges, others don’t;
  • Some have flat-rated tariffs regardless of usage;
  • Those that charge different rates depending on levels of usage (so-called inclining block tariffs) don’t all use the same sized blocks;
  • Tshwane used to bill seasonally with different rates for summer and winter, but this has changed since 2019; and
  • Eskom is included, as sizeable areas in Joburg (Sandton and Soweto) are supplied directly by the utility.
  • eThekwini has four “scales” of prepaid tariffs that are all identical. On postpaid, it only offers a time-of-use tariff which is impossible to compare against under this methodology.

Rather than attempt to compare the base tariff, in other words the cents per kWh rate, the methodology used here is to calculate how much electricity a household will receive for two amounts: R1 000 and R2 000.

Again, as pointed out in 2019, this is the lived experience of customers.

Importantly, fixed charges on some tariff structures distort matters, making a simple comparison between the rates per kWh meaningless. This methodology removes this distortion.

Amount of electricity households receive (2021/22)

Tariff R1 000 R2 000
Eskom Homepower 4 440kWh 862kWh
Eskom Homelight 548kWh 892kWh
Cape Town Domestic1 367kWh 710kWh
Cape Town Home User2 335kWh 710kWh
City of Joburg City Power prepaid 491kWh 884kWh
City of Joburg City Power residential 93kWh 606kWh
Ekurhuleni Tariff A (prepaid/credit) 548kWh 768kWh
Ekurhuleni Tariff B (prepaid/credit) 349kWh 722kWh
eThekwini (prepaid) 416kWh 833kWh
Tshwane 395kWh 877kWh
* All kWh amounts rounded down
* All amounts include Vat
* Excludes indigent households
1 For houses valued at more than R400 000 but less than R1 million
2 For houses valued at more than R1 million

The situation in Joburg is bizarre and increasingly untenable: postpaid/credit customers pay among the most for electricity across metros, while prepaid customers pay among the least.

For R2 000 in spend, Joburg postpaid customers receive more than 30% less electricity because of the fixed charges.

The municipality has repeatedly attempted to introduce a R200 (R230 including Vat) monthly surcharge for prepaid customers, but continues to U-turn on the proposals.

Until it implements some sort of fixed monthly charge, City Power prepaid customers will continue to enjoy among the cheapest electricity across the metros.

Effectively, these customers are being subsidised by City Power’s postpaid ones.

Two-year snapshot

A further analysis by Moneyweb reveals how tariff changes over the past two years have affected how much electricity you will get for the same amount of money.

It’s not as simple as assuming that two back-to-back annual increases of around 15% would result in 30% less electricity for the same amount of money.

Metros seldom keep tariff structures the same for long periods of time. Changes are made to methods of charging (block sizes in incline block tariffs are changed, fixed charges are implemented or removed, and so on).

From this comparison, the biggest decline in the amount of electricity received is for CoJ postpaid customers. This is followed by Eskom Homepower 4 and Ekurhuleni Tariff B customers, where the decrease is greater than 20%.

How much less bang you’re getting for your buck

Tariff R1 000 2019/20 R1 000 2021/22 Change
Eskom Homepower 4 571kWh 440kWh -23%
Eskom Homelight 651kWh 548kWh -16%
Cape Town Domestic1 436kWh 367kWh -16%
Cape Town Home User2 414kWh 335kWh -19%
City of Joburg City Power prepaid 575kWh 491kWh -15%
City of Joburg City Power residential 239kWh 93kWh -61%
Ekurhuleni Tariff A (prepaid/credit) 603kWh 548kWh -9%
Ekurhuleni Tariff B (prepaid/credit) 454kWh/439kWh 349kWh -23%/-20%
eThekwini (prepaid) 507kWh 416kWh -18%
Tshwane 367kWh winter
440kWh summer
395kWh 8%/-10%
* All kWh amounts rounded down
* All amounts include Vat
* Excludes indigent households
1 For houses valued at more than R400 000 but less than R1 million
2 For houses valued at more than R1 million

Update: An earlier version of this article used a (now) obsolete base tariff (/scale) for residential customers for eThekwini from the metro’s published tariff book for 2021/22.

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Money making rackets !!!

They should create more categories based on the value of each individual house. R2m, R3m, R4m etc. Instead of just having a rate for R1m and above.

Why should a house worth R1.1m pay the same rate as a house worth R30m?

Because if the house of R30M uses the same electricity he should pay the same for electricity.

The R30M house will already be paying way more in property taxes compared to the R3M house.

I agree with Everything For Free Commissar!

The same should apply to cars. Range Rover should charge indigent persons R10,000 for a new Range Rover and charge white capitalist pigs R10m for the same Range Rover.

Maybe start with petrol and food since there maybe aren’t enough Range Rovers to go around.

“Why should a house worth R1.1m pay the same rate as a house worth R30m?” That’s interesting!

I wonder if they could do the same with voting? Why should an uneducated, unemployed criminal (of whatever race) and a graduate (of whatever race) with a solid job, a bonded property and a bank account with investments have the same value vote in national elections?

Who contributes more to a functioning society?

By all means let the criminal have the right to vote; with a 10% value compared to the graduate. Of whatever race and colour.

A good study tank you; we need these more and more to decide where to live and where to try and provide our own services (water and electricity anyway). One snag is that it is the overall package that needs to be considered; rates, water, electricity etc. This is as different entities have a different balance to the overall municipal cost. A few different scenarios of this would be interesting in showing up the costs of where one lives.

Paul agreed but whenever a municipality is involved in anything you are being ripped off big time by the incompetents!!!

Tariff structure differences are going to make the comparisons difficult, never mind trying to understand business and industrial.

The simplest comparison would be to compare total electricity department revenue per kWh that they purchase from Eskom.

When I tried to get revenue and margin per tariff category from my council under PAIA they refused, saying it is secret…

To get past that rubbish and make life easier, NERSA should be able to supply this (total average cents per kWh) per licensee under one PAIA application. NERSA has proven useful in the past in disputes.

Maybe they would cooperate in a joint article with Moneyweb

For sure Johan but an overall one was done a good few years ago in one of the newspapers; when they were still worth reading!

I am surprised you couldn’t unearth the tariffs as I know eThekwini are not that shy about providing what they pay Eskom and I understand it is a simple Eskom Magaflex tariff that does vary for time of day (peak, standard & off peak) and season (high demand June to August, rest low). Around 89c/kWh for std low demand and 120c for std high demand. Peak and off peak above and below these rates.

Could be wrong of course.

Paul: I know the Eskom tariffs and my council then has multitude of tariffs. We had a new tariff category added that was extortionist and that was taking us off TOU tariffs that are the policy gold standard. The Law determines many things about tariffs including that they not be discriminatory plus NERSA guides for what mark-up is allowed (55% to 65%). When I asked eventually via PAIA for margins per tariff category council threw up the secrecy defence. Councils must have cost of supply studies per category so they certainly had the margins per category. So we declared a dispute.

NERSA two years later slapped down their demand for a standard 15% increase on the offending tariff, after NERSA asked for the same margin info. So a small victory but still my energy cost works out between 350c and 400c per kWh.

Energy is heading for a war that those that can box smarter will win. Then councils are in trouble

Great article.
I don’t understand why administered prices can differ to the extent explained in the article.
Maybe the same principle should apply to fuel prices.

“Until it implements some sort of fixed monthly charge, City Power prepaid customers will continue to enjoy among the cheapest electricity across the metros.

Effectively, these customers are being subsidised by City Power’s postpaid ones.”

I have a issue with this fake assumption by Moneyweb that pre-paid is subsidising post paid.

The issue is that CoJ has been massively hiking post-paid fixed charges and providing no value.
CoJ’s rates should match Eskom consumer rates – remember that CoJ gets the product from Eskom at wholesale/bulk rates and on sells. There is plenty of markup from Eskom wholesale/bulk rate of ~R1.28/kWh to what CoJ charges pre-paid R2000/884kWh=R2.26/kWh

CoJ should be reducing the fixed fees on post-paid.
Adding fixed fees to pre-paid is an unjustified tax and works against the whole risk benefit CoJ get from pre-paid.

CoJ should stop trying to abuse paying consumers and improve collection to above 4% in Alex.

End of comments.

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