City of Johannesburg 2024/2025 rates

General Discussions
21

That’s also the way I read it. It is just confusing as it is under the section specifically mentioning the flat rate rebate for selling back and appears to be the conditions in order to get that rate. BUT more than likely the rate you’ll be moved to when registering your embedded generator.

Perhaps badly written and might have meant cases where you want to consume and sell. I remember previous documents (either CoJ or CoCT) where there is a distinction made between “feeding back and not consuming” which makes you a vendor and “feeding back and consuming”.

22

Probably all four… No 3 = even the most efficient bureaucratic system will change direction like an oil tanker with a rubber duck rudder, and

No 4 = possibly waiting for NERSA to finalise the municipal tariff methodology before drafting and enforcing SSEG rules.

Even if not forcing TOU the signs are pointing to prepaid not being an option with embedded generation. From the docs City Power sent:

Pre_Post_TOU_CoJ
Pre_Post_TOU_CoJ722×358 138 KB

Granted the doc is dated 2021 but seems like City Power considers it “current” - and at least supports the intent to not have prepaid with PV.

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23

Where I am I cannot - I even pay it on my empty plot.

24

I stumbled upon something similar in a document for 2016/7 tariffs. So I think that one thing we have to stop saying is that this was never in the City’s regulations and so there’s a grey hole in the regulations. Clearly the City has intended for some years that PV users must register their system and switch tariffs.

Anyways, I have a nice letter from City Power now, registering a system at my address, connected to my meter. Hopefully this talisman will now ward off evil types who want to give me uphill because I have panels on my roof. Well yes I do, and I told the city, and here is the letter where they say it’s OK, all the safety standards have been met, and by the way thank you for being energy concious.

25

Let me post this here …

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26

Presumably because there is a supply to that plot, even though you’re not doing anything with it.

27

Another instance of what I mentioned above. Because you have solar, your draw from the grid reduces, and now the amount you can sell back (IE the amount they will actually pay you for) is capped and the cap is low.

So again they are thinking in the right direction - feeding back into the grid is a constructive thing to do - but then they punish you for doing the good thing.

28

I have said several times (on forums like this one) that I would happily give my excess production away as a little contribution towards the common good, but I don’t want to pay for the privilege of giving something away.

I wonder how many other folks would accept that deal: here it is. Free, gratis, and for nothing. Just don’t charge me for doing that small good thing. No contracts committing you to so many kWh per month, or saying you can give way at certain times of day. They can even use smart meters to throttle the feed-in if they are getting too much at some inconvenient time of day.

(Or can the smart meters do the throttling? IDK)

29

[ @plonkster, I though it more sensible to respond here than the DearSA thread ]

I doubt any of the municipalities have any real interest in residential electricity export or finding ways to make SSEG attractive since thye all are heavily dependent on electricity sales for revenue. So, the SSEG rates are not punishment so much as it is that SSEG is something you do “in your own time and on your own dime”.

If the CoJ is to be believed, the electricity increases actually boil down to mainly inflation related increase of the energy cost - they even indicate that their tariffs would be close to cost reflective IF losses are brought down. BUT unfortunately for prepaid users the sudden addition of the service and capacity charges make a very big difference. To some extent it actually does not make sense to my mind that two stands next to one another but with different meters (post vs pre-paid) will have one with capacity charges and one without. I suspect CoJ fell asleep at the wheel after using pre-paid as a form of reducing billing/collection problems and now realised they put the band-aid (duct tape?) over a very hairy arm - from which it now has to be yanked.

If however the electricity rates were my hill to take a stand on, I would definitely ask questions around the impact of the big change to pre-paid on City Power’s liquidity.

City Power is in a very precarious financial position (City Power 2023-2024 Q2 Report)

The company continues to face liquidity and solvency challenges in that its current assets amounting to R6,522 billion are significantly less than its current liabilities which amounts to R21,088 billion. The main contributing factor to the liquidity problem is the overdraft amounting to R14,790 billion. The company is unprofitable due to revenue targets not being met, this is mainly driven by load shedding which resulted in a decrease in sales and high non-technical losses, these are some of the factors that contributed to the increase in the bank overdraft.*
* emphasis my own

City Power apparently,

is collecting R260 million less per month than planned… City Power itself doesn’t collect revenue – the city does (the only revenue that flows to City Power directly is from prepaid meters) *
* emphasis my own

i.e. sudden increased revenue bypassing CoJ inefficient billing/collection straight to City Power won’t hurt the books? (around 275 000 odd prepaid meters). So, it might be a fair question whether pre-paid users are picking up the tab for inefficient billing/collection/finance department.

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30

There’s the split into two categories of pre-paid users: High and low. Low are homeowners who have passed (failed?) the means test for indigence, and the City are upfront about the high users (the rest of us) subsidising the low users. I don’t mind some subsidising, but I hope the net has been cast a bit wider.

City Power are also on a very public disconnection drive. This started during Mashaba’s time as Mayor (years ago) when he famously wrote an open letter to the professional body for chartered accountants which said that their training was poor and their standards low, and he says this because lots of big companies with offices in Sandton that publish public statements every year are not paying the City and nobody has noticed.

The drive continues, but it looks like non-payment is a very popular pasttime in Johannesburg.

And there are criminal syndicates involved that take control of a substation, build a cage around it so they can control access, and then they take the revenue (at a rate they decide) from all the premises that are connected to that substation.

There are residential complexes where the individual residents have paid in good faith, but the body corporate is either disorganised or somebody has done a runner with the funds (this happened to a family member of mine).

Whole shopping malls, hotels, several Telkom properties, a couple of country clubs and even a foreign embassy have been disconnected.

It looks to me like quite a deliberate game:

  • Property owner runs up a bill of millions
  • City Power get a court order and disconnect
  • Property owner says he can’t pay all of that in one go
  • Court rules that he must pay reconnection fees plus a first installment of several 100K
  • He pays
  • Reconnection is done
  • He immediately resumes not paying.

So they are letting the money out in minimal amounts and, in the long run, profiting.

The flat fee on pre-paid connections has been proposed for years. First, again, under Mashaba. The public outcry was met with a claim that the flat fee had been inserted into the budget documents after sign off. A couple of years later it was reintroduced but then immediately cancelled as part of the City’s relief package during lockdown. It’s never really gone away. I expected it to come one day, but the amount surprises me.

Connection fee - well OK. But service charges? You don’t need to read my meter, run accounts or anything like that. If I don’t feed the meter, it disconnects. Simple.

Plus there’s the cash flow, as you note. Pre-paid users are good for the City’s cash flow. Even if Eskom are giving them 60 days, they can take that money paid in advance and stick it in the money market. Money falling out of the sky.

Pre-paid users are still going to be better off under the new tariffs, but not by as much.

31

That can be quite profitable. A long time ago, through some ignorance of my own and admittedly not doing my homework properly, I accidentally ran up a 35k municipal bill on a rental property (never got the bills, but that is no excuse… I should have followed up). In any case, I immediately paid the bill (with quite some pain at the time) and stayed up to date afterwards… BUT… at the time I made an interesting observation. I saved more money on bank interest (all money from the tenant always went into the bond after expenses) than I lost over the time period I was not paying them. The mistake literally saved me money.

I can only imagine that once people start abusing that system, much much more “savings” can be made.

32

I think this boils down to regulations if I remember correctly. If you are not a net consumer then you need to be a registered vendor / supplier which becomes difficult.

This is where the City of Cape Town (if I recall) got a temporary exemption / relief from NERSA to allow them to buy more than what they’re selling. First by offsetting your municipal account and then by paying out cash after that (but then you still need to register as a supplier, but easier).

I would love to be able to offset my rates & taxes with surplus and would gladly do that with the little I have spare on sunny days (if I lived there), but there’s still the uncertainty of the cost of the meter.

Of course, the City of Johannesburg is lagging, but I believe that if this program works in Cape Town (and is sustainable) that it may become a more common thing. Pretty sure the City Power section added to the municipal account which everyone says will be used for the service and capacity charges can also easily then be used to offset the rest of the bill.

But I think the main difference is that in Johannesburg you need to be on the Domestic Time-of-use tariff where there’s peak, off-peak and standard rates and a split between summer/winter for each and you have the service charge (which is roughly the same as Cape Town’s like @plonkster mentioned), but also the just over R1k/month capacity charge. In Cape Town you need to be on the Home User tariff which is pretty much a flat rate for the first 600kWh with a smallish service charge.

  • 0 – 600 kWh: 268,33 c/kWh (excl. VAT) or 308,58 c/kWh (incl. VAT)
  • 600 kWh+: 370,92 c/kWh (excl. VAT) or 426,56 c/kWh (incl. VAT)
  • Monthly Home User service charge of R219,21 (excl. VAT) or R252,09 (incl. VAT)

From: https://www.capetown.gov.za/Family%20and%20home/residential-utility-services/residential-electricity-services/the-cost-of-electricity#section-docs

So the problems for me:

  • Need to be a net consumer which until it changes does not make it viable.
  • The extreme capacity charge.
  • The tariff being overly complicated for most (and paying R7.16/kWh in winter peak is crazy).
    • I’ve actually got no real problem with that and can schedule charge at off peak rates and standard rates to ensure no grid usage at peak times, but an easy to understand rate like Cape Town’s just makes more sense.
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33

OK… either COJ took all the objections on board, or they over cooked the proposals to give themselves room to be appear to be making concessions but

  1. Property rates still going up (of course) but by 3.8% rather than the proposed 4.8%
  2. Flat fees for prepaid meters now R230 + VAT per month (less than half the proposal)

(1) is per the media. (2) per a City councillor who usually doesn’t speak until he’s sure of the facts.

34

My sources for these two items were a national online newspaper and a City Councillor posting on a community forum on Facebook.

The Councillor has now clarified that these were adjustments to the initial proposal, but no budget for 2024/5 has been voted into effect.

The figures are not to be relied on. Sorry.

35

And this week the budget was passed. The fee for a pre-paid meter for “high” users (read “not indigent”) will be R200 plus VAT - thus R230 in all.

Another difference I have noticed between the actual and the proposal is that the proposal had 500 units on the first tariff step for high users. This was an increase over the current allocation of the first 350. But it is now back to the first 350 units being the cheapest.

Property rates % payable remains increased but not by as much as proposed.

I don’t know what if anything changed between what was rejected last week and accepted this.

Unit prices for electricity are still to be approved by NERSA.

36

https://joburg.org.za/documents_/Documents/Approved-Tariffs-for-2024-25-Financial-Year.pdf (retrieved from https://joburg.org.za/documents_/Pages/Key%20Documents/other/links/tariffs/Tariffs.aspx) seems official now.

It shows a R70 (R80.50 incl.) service charge and a R130 (R149.50 incl.) network charge and then a flat 12.72% increase on all blocks for high / ‘normal’ users.

Low / indigent users have a 4.70% increase in the first block, the same 12.72% in the second and a larger 14.72% in the highest block with no fixed service or network charge.

So essentially a R2760 increase for the year along with a 12.72% increase per kWh.

I made the table a bit more readable:

Item Consumption block Fixed charge Energy charge
kWh/month R/month c/kWh
Prepaid Low
Prepaid 1 0 to 350 219,52
Prepaid 2 351 to 500 271,10
Prepaid 3 >500 314,39
Prepaid High
Service charge 70,00
Network charge 130,00
Prepaid 1 0 to 350 236,34
Prepaid 2 351 to 500 271,10
Prepaid 3 >500 308,91

From this:
image

37

Will be interesting to see if the increases are implemented, if they are things must be getting pretty desperate there. Municipal elections are in 2 years, I doubt any councilor is going to want to have to take the responsibility for increasing pre-paid city power users bills for prepaid electricity by 50%. They may just try to kick the can down the road again and try to make it someone else problem.

38

I see things the other way around. Having the other bunch running the City doesn’t mean that things would be any cheaper. This fixed fee for prepaid meters was first proposed when Mashaba was in charge. Last year the then opposition screamed blue murder about the increase in property valuations, but they had appointed the valuators when they were in charge, and nearly the whole process, bar the handing over of the final report, happened on their watch.

Things may get better. But cheaper?

Besides, if we get a change of local government, the new bunch will - rightly - not accept any responsibility for the current tariffs. But they won’t change them.

Anyway, they are tabeled now and the budget is approved. That’s it for 12 months.

39

OK. So on Monday the new tariffs kick in. A statement from City Power creates some confusion over how they are going to implement the service charges.

“However, should the customer at the beginning of the month purchase electricity for less than R400, the payment will be split between covering the fixed charge and charges for consumption of electricity to ensure that the customer gets some kWh with every purchase until the minimum purchase threshold of R400 is reached. It will however not be possible to accumulate non-payment of the total basic charge beyond one calendar month.”

So what’s this? We HAVE to buy R400 every month?

I had assumed they were going to whack R200 plus VAT onto our bill.

40

It makes sense for City Power to collect the basic charge directly from the prepaid purchase since it should avoid delays from the COJ billing department and basically means a 100% collection rate from those people so billed.

My interpretation of the R400 per month amount is as follow:
From 1 July if you purchase R400 (or more) via a prepaid electricity vendor - R200 (ex VAT) will be subtracted for the basic charge before you have any units allocated for the balance. If you purchase for less than R400, then half goes to the basic charge and the remaining half to units (if you purchase only R100 then R50 goes to basic charge and R50 to units). IF you purchase electricity again in the same month this process repeats until you have purchased R400 in total and your basic charge is covered in full for the month. Thereafter in the same month, all purchases will be for units only.

If, during the first month, you purchase only R100 (not enough to cover the basic charge, then all purchases in the following month will first go to settle the basic charge from the previous month in full before any units will be allocated. Now the R400 threshold sequence again kicks in. What is not stated is whether interest will be levied on “arrears” basic charges.

COJ_PrePaid_BasicFee
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[ link ]

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