Johannesburg power utility City Power on Thursday announced that it will increase its tariffs by an average of 7%, effective from July 1, following the decision by the National Energy Regulator of South Africa to approve its tariff increase application across various consumer segments.

The regulator granted a 9.3% tariff increase for time-of-use (ToU) for medium-voltage customers and a 0.17% ToU tariff increase for low-voltage customers, while medium-voltage large power users (LPUs) would incur a price hike of 7.41%.

Low-voltage LPUs would see a 7.37% increase in the price of electricity.

Conventional commercial users would pay 4.79% more for their electricity, while commercial prepaid customers would shoulder a tariff hike of 9.4%.

In addition, residents who were billed using “conventional means” would pay 7.36% more for electricity, while prepaid customers would pay 7.45% more.

City Power said in a statement that it welcomed the decision by the regulator to approve all the tariff increase applications submitted by the utility, as it had “applied its mind fully” to the submissions before it made the application and had taken a number of variables into consideration.

“These tariff increases strike [a] balance between raising the required capital to improve infrastructure to ensure a steady and uninterrupted supply of electricity, and the economic realities faced by hard-pressed consumers.

“The lower increase also significantly reduces the pressure on revenue collection; the more affordable the price of electricity is kept for our broad customer base, the less severe this challenge becomes for City Power,” the utility’s MD Sicelo Xulu commented.

He added that the utility was implementing a “pragmatic” performance transformation plan that was geared towards enabling the organisation to operate efficiently, with a specific focus on meeting customer needs.

BILLING ADJUSTMENT
Meanwhile, the utility continued to encourage bulk buyers to register with the city to allow their billing to be adjusted in terms of the inclining block tariff (IBT) to reflect that they supplied other users downstream.

The IBT also reinforced the city’s bylaw on the resale of electricity in that it ensured that the end-users supplied under resale were not disadvantaged from those buying directly from the council, from a tariff point of view.

In addition, City Power noted that the cross-over point in terms of conventional and prepaid had now been increased to 4 400 kWh a month, encouraging migration to prepaid by domestic customers.

Further, consumption below 500 kWh a month on all domestic categories would see a drop in energy charges by July 1.

“We also note the introduction of a domestic ToU tariff, which provides relief to those customers who have invested in either solar-water heating, gas cooking, or both. While the ToU tariff is the first for domestic customers in Johannesburg, it is the way of the future,” the company said.

ToU tariffs enabled ToU customers to switch their load away from conventional electricity over peak times, thereby reducing their exposure to peak prices by using energy from alternative sources.

This tariff would be supported by the roll-out of smart metering, added the utility.