Property owners say they will fight city ‘tooth and nail’ over possible hefty tariff increases, R200 ‘availability cost’. Picture: Danie van der Lith/African News Agency
Property owners say they will fight city ‘tooth and nail’ over possible hefty tariff increases, R200 ‘availability cost’. Picture: Danie van der Lith/African News Agency

Joburg residents furious over possible prepaid electricity hike of up to 75%

By Anna Cox Time of article published Jun 4, 2020

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Johannesburg - Joburg property owners who have prepaid electricity meters have expressed outrage about a possible hefty 75% hike if the proposed tariffs by the City of Joburg for 2020/21 are accepted.

And they could be even bigger depending on the amount of electricity used as the stepped tariffs have changed.

Angry property developers, who have invested billions of rand in building affordable accommodation to revitalise the city, are already planning legal action against the City of Joburg over this proposed tariff of R200 a month, called an “availability/capacity” cost, to prepaid meter owners.

To add to the possible new massive bill headache, the lowest tariff block for residential prepaid customers will be reduced from 350kWh to 300kWh, which means that people using prepaid meters will pay higher tariffs once they reach the first step of 300kWh.

The Johannesburg Property and Managers Association (JPOMA), which represents R15 billion of private capital invested in more than 60 000 affordable housing units, accommodating in the region of 250 000 inner-city residents who earn between R4 500 and R15 000 a month, said it would fight the city “tooth and nail” to get the R200 availability cost scrapped.

Its members claim that combined with crime and grime, this increase spelt the death knell for inner-city accommodation and revitalisation.

Last week, the City of Joburg announced it was a proposing an electricity tariff increase of 8.1%, which was above the inflation rate, without revealing the R200 cost.

Director of the JPOMA and managing director of Ithemba Properties, Rian Reyneke, said: “Already rates are unaffordable and we get no rebates for providing affordable housing buildings. This R200 a month we have to impose on each unit is going to lose us a lot of tenants."

In essence, a residential tenant now paying R324 plus R200 amounts to R524. This is a 75% increase.

The increased threshold for step one means a household that uses 374 units a month will go from paying R527 to R780 a month, excluding VAT, from July 1 if the proposal is accepted – an increase of almost 50% over and above the R200 imposed cost.

“The City is telling everyone it is a National Electricity Regulator SA-imposed increase. This is all smoke and mirrors. Their constituencies and our tenants are going to be up in arms. Making it exponentially worse is that they are trying to sneak this in amid the Covid-19 pandemic.”

Reyneke said the information released to the public for comment did not properly disclose the full impact of the increases.

Joburg city spokesperson Nthatisi Modingoane said they were conducting public engagements for input on the proposed municipal tariffs.

“We welcome the ongoing engagement with the released documents on the proposed tariffs. We encourage Joburg residents to give input on these tariffs on the created city platforms by June 23 to ensure that their feedback is recorded and considered when the city finalises new tariffs,”said Modingoane.

According to a mayoral committee report dated March 20, the new charges are aimed at “closing the gap between prepaid and conventional users”.

It stated: “A residential prepaid customer currently does not make (an adequate) contribution to the cost of operating and maintaining the electricity infrastructure to ensure its availability on demand. It is therefore proposed to introduce a capacity charge of R200 per month for all residential prepaid customers.”

Conventional business users face a R400 availability charge. Most pay between R800 and R900 a month in basic charges.

The good news is that the free 6 kilolitres of water is to be reinstated.

Residents have until June 23 to object.

Comments can be e-mailed to [email protected]

The Star

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