Scrapped electricity fee was planned to bridge pricing gap: City Power
The fixed surcharge on prepaid electricity which the City of Johannesburg scrapped on Tuesday was supposed to bring an equilibrium between prepaid and conventional tariffs.
That is what City Power spokesperson Isaac Mangena said in a statement on Tuesday.
“The gap between prepaid tariff and conventional tariff is caused by basic charges levied on conventional customers over and above electricity tariff,” Mangena said.
“The residential prepaid customers do not contribute towards these costs. As a result, the residential prepaid customer does not adequately contribute to operational, maintenance and refurbishment costs of the electricity infrastructure to ensure continued availability of electricity supply on demand.”
TimesLIVE reported earlier on Tuesday that Johannesburg residents and businesses will not be paying a recently adopted fixed surcharge for prepaid electricity in the 2019-2020 financial year.
The surcharge of R200 a month for prepaid residential customers and R402 a month for business prepaid customers would have been implemented on July 1.
The tariff increases which came into effect on July 1 include:
- 5.5% on property rates;
- 13.7% for electricity;
- 7% for refuse removal; and
- 9.9% for water.
City finance MMC Funzela Ngobeni said consumers were burdened by rising interest rates, pressure on household disposable income and a “sluggish” economy.
“While we consider the tariffs to be cost-reflective, we cannot ignore the calls for relief by our residents.”
Ngobeni said the city will offer poor residents rebates for rates and services, and implement a debt rehabilitation programme.
“The broad concept hinges on an application process that will allow for strained household owners to apply for municipal debt rehabilitation,” the city said.
Half of the debt of customers who qualify will be written off.
Mangena said: “The intention is to, over time, achieve full convergence of the residential prepaid and conventional tariff for similar size customers.”