The National Energy Regulator of South Africa (Nersa) has approved the tariff applications of 178 licensed electricity distributors, including municipal and private distributors, for the 2024/25 financial year.
The new tariffs become effective on July 1.
In its consideration of the applications, Nersa reviewed comments from affected parties after submitting all the applications on its website.
Distributors were required to submit their tariff applications for the year in question based on their cost of supply studies. Those distributors without the cost of supply studies were required to provide Nersa with a breakdown of their electricity distributed-related costs.
City Power, as one of the applicants, will start implementing its new tariff increase, as approved by Nersa, from July 1.
City Power requested an increase of 12.7%.
City Power, as the City of Johannesburg’s power supplier, submitted a cost-of-supply study based on factors affecting its operations and customers, including industry inflation driven by increases in bulk purchases cost, operational costs and overall cost structure.
“Our tariff application to Nersa was in line with the consideration of the current economic conditions where most of our residents are affected by the rising costs of living, and we considered our customers' best interest to cushion them while ensuring sustainable service delivery continues.
“As a result, the tariff adjudgments follow intensive consultation with residents and stakeholders of Johannesburg during the recent Integrated Development Plan consultations, and other regulated consultation processes before the application to Nersa was made,” City Power states.
The utility adds that City Power reviews its tariff structures every year to determine changes in the price of electricity for its customers, while complying with the Municipal Finance Management Act, the Electricity Regulation Act and Nersa’s regulations.
Notably, the approved average tariff increase of 12.7% does not mean every customer will experience the same increase, with some customers due to have a slightly lower tariff increase and others higher.
For example, the average increase to a typical indigent customer was limited to 6.21% as they are the most vulnerable customer category.
City Power explains that the residential low prepaid customer that consumes 374 kWh a month will pay an extra R49.17 for the same power, increasing the total charge from R791.57 to R840.74.
The customer will, however, for the first 350 kWh per month pay R2.36/kWh compared to R2.09/kWh for the current financial year, which will be R41.83 more a month. The next 24 kWh will cost R65.06, which is R7.52 more than what it is costing now.
City Power elaborates that monthly consumption up to 350 kWh will be charged at R2.21/kWh, the next 150 kWh for the month at R2.71/kWh, while any usage above 500 kWh a month will be at a unit charge of R3.22/kWh.