Joburg households and companies utilizing pay as you go electrical energy are in for a shock if the mounted costs proposed within the metropolis’s draft finances are accredited.
It was tabled on Friday and stakeholders have till June 23 to remark.
The town proposes a brand new R200 primary cost for pay as you go residential prospects and R400 for pay as you go enterprise prospects.
That’s over and above the will increase to present costs per kilowatt-hour (kWh) used, that are manner above the present inflation price. The proposal is for an eight.1% improve for residential pay as you go and 5.eight% for enterprise.
As well as, the bottom tariff block for residential pay as you go prospects can be lowered by 50kWh to 300kWh, which means that increased tariff blocks will likely be reached earlier within the month than earlier than.
This implies a family that makes use of 374 items a month will go from paying R527 to R780 per 30 days, excluding Vat, from July 1 if the proposal is accepted – a rise of virtually 50%.
This isn’t correctly disclosed within the doc printed for public remark as a result of, in calculating the common improve per consumer group, solely the rise in costs per kWh used is taken under consideration.
The town tried to introduce the R200 primary cost for pay as you go residential customers final yr, with out even together with it within the draft finances, however scrapped the price after Moneyweb disclosed it.
In response to a report back to the mayoral committee dated March 20 that Moneyweb has seen, the brand new costs are aimed toward closing the hole between pay as you go and standard customers.
It states that the: “Residential pay as you go buyer at present doesn’t make [an adequate] contribution to the price of working and sustaining the electrical energy infrastructure to make sure its availability on demand. It’s subsequently proposed to introduce a capability cost of R200/m for all residential pay as you go prospects.” (sic)
Closing the hole
If town will get its manner, it’s going to more and more be closing the hole between residential pay as you go and standard customers over the subsequent three years.
Residential customers who’ve been shopping for electrical energy on credit score are at present paying mounted costs of R527 per 30 days. The town proposes growing this to R757 per 30 days, in itself a 43% improve.
In its finances doc town additionally understates the proposed tariff improve for typical customers at eight.1% by excluding the mounted costs from the calculation.
The introduction of the R400 primary cost for pay as you go enterprise prospects can also be aimed toward closing the hole between them and standard customers. Within the report back to the mayoral committee it’s proposed that this be elevated by an additional R400 subsequent yr.
Typical enterprise customers at present pay between R800 and R900 per 30 days in primary costs, with the unit price solely barely decrease than that of their pay as you go counterparts.
The report back to the mayoral committee states: “At present prospects on enterprise tariff can keep away from paying any primary costs by merely changing to the pay as you go tariff. The enterprise pay as you go buyer at present doesn’t make [an adequate] contribution to the price of working and sustaining the electrical energy infrastructure to make sure its availability on demand.”
Proposed will increase exceed Nersa guideline
In response to David Mertens of the Nelson Mandela Bay Enterprise Chamber, who has performed a examine of electrical energy tariffs, the rise the Metropolis of Joburg is searching for is nicely above the Nersa (Nationwide Vitality Regulator of SA) guideline of 6.22% and can want correct justification.
Mertens says that whereas the brand new primary costs will likely be a shock to prospects, they is likely to be justifiable.
He says primary costs within the tariff construction can mitigate the chance of non-payment and electrical energy theft. If meter tampering ends in undercharging, the essential cost will a minimum of assure the municipality some earnings.
Mertens says most municipalities are under-recovering on home tariffs “as a result of that’s the place the votes are” – and Nersa has been permitting it.
This ends in different buyer teams, particularly business, paying extra to subsidise residential customers.
“Home tariffs ought to work out round R2.00 to R2.20 per kWh on common and the present tariffs within the Metropolis of Joburg are nicely beneath that,” he says.
The price of home customers
Mertens says the rationale concerning mounted costs is clearly aimed toward overlaying the substantial primary price home customers signify for municipalities.
Whereas a hard and fast cost is in step with price reflectivity and ought to be a part of the tariff, the quantity at which such a cost is about might be debated, he says.
“I feel R100 to R150 per 30 days and even R200 per consumer wouldn’t be unreasonable,” says Mertens. “R500 for typical metering appears very heavy to me, however that is likely to be the correct measure to maneuver folks to pay as you go and to do away with non-payment.”
Mertens additionally notes that the Metropolis of Joburg has electrical energy losses of greater than 20%, greater than double the speed anticipated from a superb distributor. The town would attempt to compensate for the loss via tariffs, he says.
“The massive query is what town will do to stem the losses and improve effectivity.
“The mounted cost would possibly assist in some respects, however the issue is way greater than that.”