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New eThekwini Municipality tariff structure for renewable energy use a blow for ratepayers

Households that have opted to use renewable energy while still remaining connected to the eThekwini Municipality’s power grid as a back-up system will pay more for electricity.

Durban’s City Hall. File Picture

Published Jun 24, 2021


DURBAN - HOUSEHOLDS that have opted to use renewable energy while still remaining connected to the eThekwini Municipality’s power grid as a back-up system will pay more for electricity as the council looks for ways to hold on to muchneeded revenue.

It emerged during an executive committee meeting on Tuesday that the council could lose R1 billion a year as people move towards renewable sources of energy.

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These electricity tariffs would affect mostly those who would be using a hybrid of municipal electricity as well as renewable energy. The municipality announced that electricity tariffs had been placed at 14.56%. A new tariff structure would kick in on July 1.

Maxwell Mthembu, the head of electricity, said those using the hybrid of renewable energy and the municipality’s power could expect to pay more because the municipality was reserving energy for when they needed it.

He said this was not to punish residents who used renewable energy – which the city encouraged – but to recover the costs it incurred due to the back-up supply for that particular resident.

In its report, the municipality said load shedding and the rising costs of electricity had forced customers to be more aware of their electricity usage.

In an effort to reduce costs and the burden on the electrical grid, customers were continuously seeking cost-effective methods to reduce their consumption.

As customers generated their own electricity as promoted by changes in the Electricity Regulation Act, they would buy less from the municipality.

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This, said the report, would result in revenue losses dictated by the number of customers who generated their own electricity, and the quantum thereof.

“Modelling exercises indicate that the municipality could lose up to R1bn per annum should customers generate their own electricity,” said the report.

It said that to ensure a better alignment of the Electricity Unit with the changing regulation and generation appetite of customers, the municipality proposed that renewable energy tariffs be implemented.

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“If a person says they are getting completely out of the municipal grid, we would not be charging those individuals anything,” said Mthembu.

“But if a customer says that they will rely on renewable energy sources during the day, for instance like solar power, and when the sun is not out they need to switch back to the municipal grid, I'll be charging those people a little more on the tariffs as we have to reserve the energy for them.

“We buy the electricity from Eskom and we have to keep the energy for that customer for when they need it; it could be at night or when the solar has not generated energy,” he said.

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Mthembu said the city was faced with financial losses, not only from people moving away from the municipal grid, but others cheating the system.

“We have discovered that there are individuals who have tampered with our old meters in that they have connected their renewable energy to meters. They will use our electricity and when their renewable energy kicks in, that reverses the recording on the meter, so we have people who are using our electricity for free,” he said.

He said they would also engage with businesses that had access to supplies that they could sell to the municipality.

“The people who also want to sell to us can, but we have enough supply and therefore we will be buying the power not at the rate we pay to Eskom,” he said.

Mthembu said they were notifying customers who were switching to renewable energy to inform the municipality so that it could install new meters.

Sibusiso Makhanya, the deputy city manager for trading services, said that as far as they were aware, no big renewable energy projects were being implemented, so the proposed tariff increase was not going to affect many and was just a measure to prepare for the future.


The introduction of a new tariff structure for those who use renewable energy and an infrastructure levy for all consumers is some of the measures being adopted by the eThekwini Municipality to hold-on to much needed revenue. | African News Agency (ANA) Archives

Related Topics:

City of Ethekwini