By Lehlohonolo Lehana.
Photo Credit: Michel Bega.
The City of Johannesburg (CoJ) will review the R200 surcharge on prepaid electricity meters in response to concerns raised by residents and various stakeholders.
In July, City Power announced that residential prepaid customers would be charged an additional R200 basic charge for electricity network and service charges, sparking ourage among residents.
The fee consists of an R70 service charge and an R130 network capacity charge before VAT is considered.
Finance MMC Dada Morero says the city’s council remains committed to reviewing the contentious electricity surcharge.
“Our objective is not to overburden residents and businesses of Johannesburg, but to ensure a financially viable city that is well maintained and well run for the benefit of more than six-million residents of Johannesburg.”
The city’s R200 electricity availability charge is a fixed charge that is levied to ensure revenue availability for sustained service delivery, infrastructure maintenance and upgrades to supply electricity to residents, he explains.
The additional charge will be reviewed in consultation with CoJ’s executive committee, City Power, the National Energy Regulator of South Africa and State-owned Eskom.
A municipality can only adjust its budget once in a financial year after reviewing the mid-year performance. The National Treasury will also be engaged as part of the review of the charge to ensure that it is changed during the adjustment budget, he says.
“We call on ratepayers to continue paying their municipal accounts every month.
“However, the comment by the Energy and Electricity Minister Kgosientsho Ramokgopa that the affordability of electricity should be investigated because electricity generation and distribution costs require a multifaceted approach by all spheres of government is encouraging, “Morero added.
City Power board chair Bonolo Ramokhele says the municipal power utility’s infrastructure will crumble if it scraps the prepaid electricity surcharge implemented on 1 July 2024.
“We must maintain the lines, substations, you name it and if we don’t invest in infrastructure, it will crumble and create a much bigger problem for all of us,” said Ramokhele.
Ramokgopa highlighted this issue shortly after the metro implemented the fee.
“We did warn a few years ago that at the rate of perennial underinvestment in relation to municipal distribution infrastructure, you are likely going to hit a snag sometime down the line,” he said.
He added that municipal revenue generation had gradually eroded due to the challenging economy, resulting in less and less investment in replenishing and maintaining electrical infrastructure.
“Then we are seeing a spike in municipal tariffs that is making electricity unaffordable, resulting in conditions of what I refer to as energy poverty,” he said.