Residential Electricity Tariffs Restructured as of 01-07-2013 in Cape Town

While the overall average increase in Electricity for Cape Town is 7.86 % for the 2013 /14 financial year (as opposed to the 11% average increase for 2012 / 13), the residential tariffs in the low consumption bands have been significantly restructured.  Most significant is the restructuring of the Free Basic Electricity units for households on the LIFELINE tariff.  Essentially the Lifeline tariff is being weighted to support households that use less than 250kWh per month i.e. households with a very low disposable income or households with super low electricity consumption.    

Lifeline Tariff with Free Basic Electricity (see Table 1):

In 2012/13 consumers who consistently used less than 450kWh per month qualified for the Lifeline tariff and received 50kWh free electricity per month. This has changed and the Lifeline electricity tariff for 2013 / 14 allocates 60kWh of Free electricity to consumers who use less than 250kWh per month. Consumers who use between 250kWh and 450kWh will now get 25kWh of free electricity units.

Domestic Tariff (see Table 1):   

Electricity tariffs for households that consistently use more than 450kWh per month and are therefore not eligible for Free Basic Electricity units pay 142.50 cents (R1.43) including Vat per kiloWatthour unit for consumption between 1kWh and 600kWhs.  Above 600kWhs, the rate including Vat is 152.00 cents (R1.52)  

Residential Electricity Tariffs for Cape Town. Prices in cents per kiloWatthour incl. Vat 2012/13 2013/14 % increase
Lifeline Block 1: 0 – 150kWH  74,02 90,86   22.75 %
Lifeline Block 2: 151 – 350kWH 102.54 90,86 – 11,40 %
Lifeline Block 3: 351 – 600kWH* 134,59 210,90   56,63 %
Lifeline Block 4: 600+  kWH* 157,30 210,90   31,97 %
* repeated consumption of more than 450kWh per month will result in household being removed from Lifeline to Domestic Tariff.
Domestic Block 1: 0 – 150kWH 129,05 142,50 10,42 %
Domestic Block 2: 151 – 350kWH 134,65 142,50 5,83 %
Domestic Block 3: 351 – 600kWH 134,65 142,50 5,83 %
Domestic Block 4: 600 +  kWH 159,81 173,28 8,43 %

What 450kWhs per month costs a residential consumer?

A lifeline Tariff consumer / household will pay R476.18. (In 2012/13 this consumer paid R453.40 for the 450kWh per month.) A Domestic Tariff consumer/ household will pay R641.25. (In 2012/13 this consumer paid R597.52 for the 450kWh per month.)

Selling Electricity to the City – Small Scale Power Generation

In spite of talk and policy statements about Cape Town being a sustainable city committed to reducing its carbon footprint, the City of Cape Town is not incentivising small scale power generation. This is clearly evident when one looks at the tariff structure for residential power generation.  For the right to export and sell electricity generated on residential property to the City’s grid, the small residential electricity producer must pay a daily service charge of R12.08 including Vat which amounts to aprox. R360 each month.  They must also be net consumers of electricity . The City will purchase electricity at a cost of R0.52 (52.49 cents) from the residential electricity producer while the residential electricity producer will pay R1.01 (101.25 cents) to buy electricity from the City.  This is double their selling price and it means that the Return on Investment of small scale residential electricity investment for a residential property is unlikely to be attractive.  Commercial enterprises on the Small Power 1 tariff are also eligible to sell electricity they generate to the City at R0.52 while electricity they need to purchase from the city will cost them R1.27 and a daily service fee of R23.56.  Click here for more info about Small Power Generation.    

While it is understandable that the City may be concerned about the loss of revenue needed to expand and maintain the metro’s electricity infrastructure, the generation of electricity on private land using renewable energy systems means a lower carbon footprint for the City, private research and investment in finding urban solutions for energy generation and a journey toward a measure of energy independence. As the Design Capital of the World 2014, Cape Town is missing an opportunity to proactively encourage the design of a truly sustainable African City!   

KimK –  June 2013