Double whammy hits Cape power bills

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Copy of Copy of IOL bus mar11 Eskom power Reuters File photo: Mike Hutchings

Cape Town - Capetonians have been hit with a four-way whack to their pockets for electricity, dismaying ratepayers.

A deluge of listeners responded to the subject on 94.5Kfm on Tuesday, with most claiming their bills had “almost doubled” in the past month.

The Cape Argus established there were four distinct factors potentially responsible for this.

First, it’s winter, and the city sells far more electricity in winter, which means that the average Cape Town home uses significantly more too.

Second, the City of Cape Town increased electricity rates across the board by an average of 7.63 percent on July 1.

This was after Eskom increased the price it charged the city by approximately 8 percent on July 1.

Third, also as of July 1, the city moved many customers between its two residential tariffs, the “lifeline tariff” and the “domestic tariff”.

The “lifeline tariff” is a subsidised tariff intended to protect the poor from the recent price rises. These customers qualify for free basic electricity - 60 free units a month for those who use less than 250 units a month, and 25 free units for those who use 250 to 450 units a month.

Customers who qualify for this tariff also pay less per unit - 96.12c a unit for the first 350 units. Above 350 units a month, they pay R2.33, to prevent abuse of this subsidy. The free portion forms part of the first block - so customers would in effect only pay the lower rate for the first 290 units or 325 units, depending on where their average is.

Units under the “domestic tariff” cost R1.53 a unit for the first 600 units a month, and R1.86 a unit after their first 600 units a month.

Now the city has introduced a property value threshold - only customers whose homes are worth R300 000 or less, or who are pensioners or indigent in terms of city policies, now qualify for the “lifeline tariff”. Thus, any customer whose home is worth more than R300 000 will have been moved to the “domestic tariff” on July1.

But this applies only to customers with a “credit meter” - those who do not have a prepaid meter.

Fourth, every July 1, the city also moves households between the “lifeline tariff” and the “domestic tariff”, depending on whether their average monthly unit usage is above or below 450 units. This is typically calculated between May 1 and April 30, but it can vary.

The calculation is always over a consecutive 12-month period to provide an accurate average not influenced by seasonal changes in consumption. This applies only to customers with a prepaid meter.

Acting mayoral committee member for utility services Brett Herron said on Tuesday that moving customers between tariffs could have “resulted in a significant price increase to these consumers, and was communicated to them via a notice on their accounts in May and June, but is not in itself an increase in tariff, but a change in tariff”.

Cape Argus


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