Johannesburg - As poor South African households foot their first bill with the new increased electricity tariffs, they have to deal with another blow, the reduction of their free basic electricity.
For one Cape Flats resident, who relies heavily on the free electricity to meet her family’s energy needs, it was her darkest hour when she realised that she had been stripped of half of the allowance.
“How can they cut it without telling us? First they increase the price of electricity and now this,” she said.
Driven by the anxiety of realising that she might run out of power in the middle of one of the coldest winter months, she was desperate for answers.
Free basic electricity in some Cape Town households was halved from 50 kilowatt-hours (kWh) to 25kWh from July 1, the day on which the new tariffs came into effect.
The free basic electricity policy was first implemented on July 1, 2003 to address the energy imbalance in the domestic sector, as the country embarked on an aggressive Integrated National Electrification Programme.
The allocation of free basic electricity was set at 50kWh as the average poor household did not consume more than that per month at the time.
Some municipal areas have been providing free basic electricity of between 20kWh and 100kWh per month to its poor households since 2001.
Neither Eskom nor the Department of Energy, which oversees the free basic electricity policy, responded to questions as to why there was a reduction when it was said before the National Energy Regulator of SA (Nersa) that poor households would be shielded from the increased tariffs.
Eskom has increased electricity tariffs by 8 percent as per the increase granted by Nersa for the third multi-year price determination period, which will run to 2017.
But yesterday, the utility said the decision to reduce free basic electricity units was made by the municipalities.
In Cape Town, certain households eligible for free basic electricity are now getting more than 40 units less for R100, a critical reduction for communities that had relied vastly on the 50kWh to power their homes.
The City of Cape Town said the changes were a result of Nersa’s requirement that it change the structure of its electricity tariffs from four blocks to two blocks.
“This meant that the impact on the electricity bill is not uniform, but depends on the particular consumption. In some cases, the bill is now lower than previously and in other cases, significantly above the average increase.
“In order to ameliorate this impact, it was decided to alter the free basic electricity provision for those under the lifeline tariff,” said Ian Neilson, the mayoral committee member for finance at the City of Cape Town. Households using less than 250kWh a month received an increased free basic electricity provision of 60kWh, but those using between 250kWh and 450kWh now receive only 25kWh per month.
Neilson said this was because consumers using between 250kWh and 450kWh per month tended to be in a significantly more affluent group.
Even though Neilson said this, a household that bought 110.1kWh only received 25kWh of free basic electricity.
Municipal customers also pay more than those who buy their electricity directly from Eskom. The City of Cape Town said Eskom’s bulk charges were only 68 percent of their total electricity costs.
This was because municipalities have to foot the bill for the installation, operation and maintenance costs. They also included a levy on top of Eskom’s tariff.
In Johannesburg, City Power provides free basic electricity to anyone who earns less than R3 366 a month including owners, tenants and lodgers who are registered for its Siyasizana social package.
The utility did not respond to Business Report’s questions on whether changes in the structure of electricity tariffs as requested by Nersa had resulted in a reduction of free basic electricity to households.
Customers buying electricity directly from Eskom in certain townships and rural areas of KwaZulu-Natal have been receiving less and inconsistent units of free basic electricity compared with those supplied by the City of Cape Town.
Eskom did not respond to questions why this was the case and whether those free units would also be reduced. - Business Report