City of Johannesburg Finance MMC Dada Morero announced that the municipality is reconsidering the R200 fixed charge for prepaid electricity users following widespread public outrage and criticism from civil action organizations.
In an interview with Newzroom Afrika, Morero acknowledged the concerns raised by the community and stated that the council is reviewing the fee. The review will adhere to the approvals granted by the National Energy Regulator of South Africa (Nersa).
“We’ll have to look into a number of factors, including the city’s affordability and our ability to sustain this charge,” said Morero. He also mentioned that residents registered under the municipality’s Expanded Social Package are exempt from the availability charge.
“We are also going to have to look at how we can meet halfway with the customers who are saying this may be too high for them to afford,” Morero added.
This reconsideration is surprising as Johannesburg Mayor Kabelo Gwamanda recently told eNCA that the surcharge “is here to stay” and is an essential part of the City of Johannesburg’s funding model. The surcharge contributes a portion of the R83-billion budget for 2023/24 and was implemented following extensive public participation.
Gwamanda explained that the availability charge is a legislated fee necessary for metros and has been in place in other cities such as Ekurhuleni, City of Tshwane, and City of Cape Town for years.
Nersa recently approved municipal electricity tariff hikes effective from 1 July 2024, which included a new R230 fixed charge, including VAT, for prepaid electricity users across South Africa. This change sparked significant backlash among prepaid electricity users in Johannesburg, who expressed alarm over the reduced number of units received when recharging.
One MyBroadband Forum user shared that a R500 recharge yielded only 99.30 units, with only R235 going towards electricity credits. Another user highlighted that post-paid customers were previously the only ones charged hefty service fees, which do not apply to prepaid customers, thus questioning the need for parity in service fees.
The Organisation Undoing Tax Abuse (Outa) urged the City of Johannesburg to reconsider the charge. Julius Kleynhans, Outa’s executive manager for local government, called for the surcharge to be scrapped, noting that for many low-income families relying on prepaid meters, the additional R230 monthly expense is unmanageable. He argued that the surcharge penalizes efforts to reduce electricity consumption.
Julia Fish, manager at Outa initiative JoburgCAN, stated that the fee effectively increases electricity costs for low-consumption households by over 100%.
Energy analyst Chris Yelland also criticized the surcharge, calling it outrageous and asserting that it was never subjected to a public process. He disputed Gwamanda’s claims of comprehensive community engagement before the tariff’s approval, stating that neither the City of Johannesburg nor Nersa conducted a meaningful public process for the R230 fixed charge.
Yelland warned that the high prepaid electricity price hikes could increase the risk of social unrest in the metro.
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