City of Johannesburg finance MMC, Dada Morero, announced a review of the R200 fixed charge for prepaid electricity users after public outrage. While Mayor Gwamanda previously stated the surcharge was permanent, Morero acknowledged community concerns and the need for affordability. Exemptions exist for those on the Expanded Social Package register.
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By Myles Illidge
City of Johannesburg finance MMC Morero says the municipality is reviewing the R200 fixed charge for prepaid electricity users, following outrage from the public and criticism from civil action organisations.
Speaking to Newzroom Afrika, Morero said the metro had acknowledged concerns raised by communities about the new fee and that council is reviewing the amount.
He added that the review will be conducted within the approvals the City of Johannesburg received from the National Energy Regulator of South Africa (Nersa).
“We’ll have to look into a number of factors. Look at affordability in terms of the city and at what level we are able to carry this thing,” said Morero.
He added that residents on the municipality’s Expanded Social Package register qualify for exemption from the availability charge.
“We are also going to have to look at how we can meet halfway the customers who are saying this may be too high for them to afford,” he said.
The change of heart is surprising as Johannesburg Mayor Kabelo Gwamanda told eNCA a few days ago that the surcharge “is here to stay”.
“It is part of our funding model as the City of Johannesburg that contributes a certain percentage to the R83-billion that was passed through the 2023/24 budget,” said Gwamanda.
“This process had gone through extensive public participation, and it’s not punitive.”
He added that the city had engaged communities to raise awareness of the surcharge’s implementation.
When asked how long the surcharge would be in place, Gwamanda indicated that the availability charge would be here to stay.
“This is a legislated fee that has to be paid by metros in particular, and all of them, Ekhurhuleni, City of Tshwane, City of Cape Town have been doing it for years,” he said.
“That is part of a funding model for metros. As the City of Johannesburg, we needed to implement it now.”
Nersa recently approved municipal electricity tariff hikes effective from 1 July 2024, including a new R230 fixed charge, including VAT, for prepaid electricity users in South Africa.
The change sparked outrage among prepaid electricity users in the metro, who were alarmed at the small amount of units they received when recharging.
“Topped up R500 this morning and got 99.30 units,” one MyBroadband Forum user posted.
A screenshot they shared of their prepaid electricity token revealed that, of their R500 recharge, only R235 went towards electricity credits.
Another complained that postpaid customers were previously the only ones charged hefty service fees to cover finance actions needed to manage these accounts.
“These do not exist for prepaid, therefore there is no need to get parity between ‘prepaid’ and ‘postpaid’ in service fees,” they said.
Civil action group the Organisation Undoing Tax Abuse (Outa) urged the City of Johannesburg to reconsider the charge, with its executive manager for local government, Julius Kleynhans, calling for it to be scrapped.
“For many residents, particularly low-income families who rely on prepaid meters to manage their electricity usage, this extra R230 a month is an insurmountable expense,” said Kleynhans.
He said the surcharge effectively penalises Johannesburg households for their efforts to reduce electricity consumption.
Julia Fish, manager at Outa initiative JoburgCAN, said the fee effectively increased the cost of electricity costs for low-consumption households by over 100%.
Energy analyst Chris Yelland also criticised the surcharge, describing it as outrageous and saying it was never subject to a public process.
He slated Gwamanda’s claims that the city undertook a comprehensive Integrated Development Plan (IDP) consultative process in all wards.
Gwamanda said the municipality engaged with residents and their representatives before the new tariff was approved.
Yelland said the claim that the City of Johannesburg followed a public process doesn’t hold water.
“The reality is that this R230 per month fixed charge has never been subject to a public process by the City of Johannesburg,” he said.
“The National Energy Regulator of South Africa (Nersa) has also not subjected it to any meaningful public process.”
He warned that the high prepaid electricity price hikes in the metro could heighten the risk of social unrest.
Read also:
- Eskom hits milestone of 100 days without loadshedding in SA
- Nyati – how Eskom’s killing loadshedding, creating surplus
- FT: Eskom chair Nyati says the utility is “fixed”, loadshedding over
This article was originally published by MyBroadband and has been republished with permission
