Which Residential Electricity Tariff you are on. Why?

How does the City of Cape Town know which residential electricity tariff block you are on?  I get numerous queries each week about the finer details of the residential / domestic electricity tariffs and how they are calculated.  Just a reminder that I am an independent energy auditor – not a City official.  As I understand the tariff payment system, the city has invested in a sophisticated computer modeling system that keeps long term records of our payments whether by monthly accounts or pre-paid meters.

There are currently two residential tariffs each with two steps or blocks:

The Lifeline Tariff for lower income households which is subsidised and the Domestic Tariff.

A third, the Home User Tariff is being introduced Screen bean with energy accounton 1 July 2017 and includes a service or basic infrastructure fee.  Annual increases are advertised for public comment in the press in April / May each year and are implemented as of 1 July each year.

The Domestic Tariff has two consumption categories – Block 1 for consumption below 600kWhs / units of electricity per month and Block 2 above 600kWhs.  Households getting accounts will see the charges set out in the account.  The units at the Block 1 price and additional units at the Block 2 price are listed in the monthly account.  Sometimes there is a slight discrepancy with more units being charged at the Block 1 price and visa versa.  This is because the computer system works on a 30 day month and has to make adjustments for the months with 28 and 31 days in them.

Domestic Block 1 – below 600kWhs each month is R1.64 excl VAT  /  R1.87 incl Vat  per kWh. (2016 17)

Domestic Block 2 – above 600kWhs each month is R2.00 excl VAT  /  R2.28 incl Vat  per kWh. (2016 17)

If you are paying on a pre-paid system, when you buy electricity, the `request’ goes directly to the City’s computer data base.  The system then calculates how many units you have already bought for the month and charges you accordingly – no matter how many times in a month – or how much you buy at a time.  The system keeps a running record.  A TIP to save money.  If you routinely use just more than 600kWhs per month, be careful of buying a large sum of electricity on the last few days of the month to take you into the new month. Why! Because then you will be charged at the higher Block 2 tariff even though you are using the electricity in the following month. Best to work out how much you typically spend on electricity each month and try to buy a once –off amount. That way you can keep track of your expenditure – and set targets to reduce consumption.

The Lifeline Tariff.  If you qualify for the Lifeline Tariff by virtue of having a pre-paid meter, meeting the lower income criteria and consuming less than 450kWhs on average each month calculated over 12 consecutive months you should stay on Lifeline.  However, if you regularly use more than 450kWhs per month the system will shift you to Domestic tariff Block 1.  Note that a number of households were shifted on 1 October 1017 – without being directly informed – from Lifeline to Domestic even though they used less that 450kWhs per month because these households were identified by the rating system as being in higher income areas. Lower income households or pensioners who meet the subsidy requirements now have to contact the city individually to apply for the Lifeline Tariff and prove that they are what the City calls `indigent’ households.

Lifeline Block 1 – 0 – 350kWhs each month is R0.97 excl VAT / R1.11 incl Vat  per kWh. (2016 17) + 60 free kWhs

Lifeline Block 2 – above 350kWhs each month is R2.69 excl VAT / R3.06 incl Vat  per kWh. (2016 17) + 25 free kWhs below 450kWhs used per month.  The free units below 450kWhs per month balance out the high kWh price.

The Home User Tariff.  Thirdly, in response to declining residential electricity consumption and revenue to the

Municipal revenue sources - averages across RSA.

Municipal revenue sources – averages across RSA.

City as many of us become energy efficient and/ or invest in energy saving technologies (e.g. solar geysers) the City has introduced a new tariff The Home User Tariff scheduled for implementation on 1 July 2017.   This tariff will apply to home owners and includes a monthly infrastructure or basic service fee which will be added to the rates account along with the other monthly services such as refuse removal.  So the City plans to charge R242.70 per month for the access to electricity.  The kWh charges will be in two Blocks below and above 600kWhs.  The kWh / unit charge for Block 1 will be less than the current charge on Domestic Block 1.  Table of charges below.

 

 

Home User Block 1 – below 600kWhs each month is R1.29 excl VAT  /  R1.47 incl Vat  per kWh. (2016 17)

Home User Block 2 – above 600kWhs each month is R2.00 excl VAT  /  R2.28 incl Vat  per kWh. (2016 17)

Kim Kruyshaar 02 2017

 

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4 Responses to Which Residential Electricity Tariff you are on. Why?

  1. Chris February 21, 2017 at 3:37 pm #

    Hi

    If your Municipal Rates bill values your property under R1m and your average consumption is less than 350kw per month, do you still have to apply as an indigent household?

    • admin February 23, 2017 at 5:49 pm #

      If you have been shifted off Lifeline to Domestic and your property is valued below R1m then Yes – query this with the City and apply for the indigent subsidy. There may however be other monthly income requirements that you may have to meet.

  2. David May 25, 2017 at 1:53 pm #

    So is there any truth to the rumour that it is more expensive to be on pre-paid than accounts? Or are charges based entirely on levels of consumption irrespective of how one is billed/paying?

    Thanks, Kim!

    • admin May 30, 2017 at 5:36 pm #

      we are charged on consumption no difference between account system and prepaid in Cape Town. Some other municipalities do charge a small fee for administering accounts.

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