City of Johannesburg Residents Face 12.7% Electricity Tariff Increase

Residents of Johannesburg are set to experience a notable increase in their electricity bills following the National Energy Regulator of South Africa’s (NERSA) approval of City Power’s application for a 12.7% tariff hike.

Reasons Behind the Increase

City Power spokesperson, Isaac Mangena, explained that the utility’s decision to apply for the increase was made after a thorough assessment of multiple factors influencing operations and customer impact. These factors include:

• Inflation: Rising prices affecting the overall economy.
• Operational Costs: The ongoing expenses required to maintain and improve the electricity infrastructure.
• Cost Structure: The financial framework within which City Power operates.

Mangena emphasized that the tariff increase aims to balance the need for sustainable service delivery with the economic hardships faced by residents.

Special Consideration for Indigent Customers

Understanding the financial strain on vulnerable populations, City Power has decided to implement a smaller increase for indigent customers. Mangena stated that the average increase for this category is limited to 6.21%, recognizing their heightened vulnerability to cost hikes.

Eskom’s Court Order Against the City of Joburg

In a related development, Eskom has secured a court order demanding that the City of Johannesburg settle its escalating debt, which has now reached R3.4 billion due to accrued interest.

• Payment Default: City Power began defaulting on payments to Eskom in October 2023, with no payments made since March 2024.
• Court Proceedings: The municipality’s counter-claim against Eskom, alleging potential over-billing and seeking an automatic set-off, was dismissed with costs. Eskom has demanded full payment of the outstanding amount by June 21, 2024.

Impact on Residents

The approved tariff increase means that residents will need to budget more for electricity, adding to the financial pressures from rising living costs. The impact on households will vary, with indigent customers receiving some relief through a lower percentage increase.

Conclusion

The 12.7% tariff increase approved by NERSA for City Power highlights the complex balancing act of maintaining sustainable service delivery while considering the economic challenges faced by residents. As Johannesburg navigates these changes, the emphasis on supporting vulnerable customers is a positive step, though the broader financial impact remains significant.

Residents are encouraged to stay informed about their electricity usage and explore ways to manage their energy consumption effectively in light of the upcoming changes.