• You are not registered on MyBroadband, which means you miss out on great benefits. To join our community is very easy, and completely free. Register now.
  • New Two-Day Giveaway - Enter Here

City of Cape Town- Changes to your electricity tariff structure and costs

saturnz

Honorary Master
Joined
May 3, 2005
Messages
11,492
#1
Dear resident

This is for your attention as a City electricity customer who has a prepaid meter and whose residence has a municipal property value of R1million or greater; or who has a credit meter regardless of property value. You have been identified as such a customer.

You are currently on the Domestic Tariff, which aims to recover the full cost of providing electricity to a property. While the largest component (70%) of the cost of providing electricity to your home covers the purchase from Eskom of the electricity that you use, some 30% of the total costs are fixed. The fixed costs associated with providing electricity to residents remain the same whether more or less electricity is used. Previously, a fixed cost was in place.

Currently this delivery charge is recovered via electricity sales as an energy fee which is measured in a cent per kilowatt-hour (c/kWh) charge. Under the current tariff formula, the fixed cost contribution of those who buy fewer than 600 units a month is being subsidised by those who buy more. As fixed costs bear no relation to consumption on the property, the City believes it is reasonable that those living in properties valued at R1 million and over contribute equitably towards these costs.

The service charge or the Home User tariff is proposed as R150 per month (lower than the proposed R219 amount for 2017/18) combined with an energy fee of approximately 185.32 c/kWh for the first 600 units per month, as compared to the higher cost of 210.32 c/kWh on the Domestic tariff.

You have been identified as an eligible customer that will move to the proposed Home User tariff on 1 July 2018.

To ensure households pay their share of these fixed costs irrespective of how much electricity they consume, the City aims to recover these costs through a fixed monthly service charge rather than as a component of a c/kWh charge.

This is proposed to be done through the Home User Tariff which charges the fixed component as a monthly service charge that will reflect as a separate item on your rates bill rather than as a variable c/kWh energy fee. Consequently the c/kWh charge will now be lower and reflective of what you actually use.

Fixed charges for electricity have already been implemented by Eskom, City Power and the City of Mangaung for example.

We have really tried our best to keep these changes as affordable as possible.

*sigh*
 

Budza

Executive Member
Joined
Oct 14, 2008
Messages
7,262
#5
Makes sense- all the people with money that used to pay the higher tariffs have gone solar, leaving the middle class + non-payers to carry that load.

Soon the middle class will be able to get off the grid.

Gonna be fun! :)
 

deweyzeph

Executive Member
Joined
Apr 17, 2009
Messages
6,424
#6
As fixed costs bear no relation to consumption on the property, the City believes it is reasonable that those living in properties valued at R1 million and over contribute equitably towards these costs.
What exactly is reasonable about that? I don't pay extra for a loaf of bread at Pick 'n Pay because my house is worth more than R1 million, so I don't see why I should have to pay more for electricity on the same basis. It costs the city the same to deliver electricity to a R400 000 house as it does to a R2 million house. The cost of a service should be based on what it costs the supplier to deliver the service, not on the assumed wealth of the customer.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
6,039
#8
Under the current tariff formula, the fixed cost contribution of those who buy fewer than 600 units a month is being subsidised by those who buy more. As fixed costs bear no relation to consumption on the property, the City believes it is reasonable that those living in properties valued at R1 million and over contribute equitably towards these costs.
Surely the fixed costs are predominantly related to how many kWh or mWh the city has to provide and only an incremental component of those fixed costs are "per connection/property" costs?

And if their logic is that people who buy fewer than 600 units are being subsidised by people who buy more, why does it make sense to make the same people who are most likely to buy more, pay more? Shouldn't they be charging those who buy less than 600 units a fee to make up the difference??

Then add to that the likelihood that more expensive properties house more people, therefore, the fixed cost per person is likely to be far lower on a per capita basis in more expensive properties.

This is also basically saying that more efficiently you use electricity, the more you should be penalised.

Even if we accept that there is a uniform fixed cost per connection, then wouldn't it make sense that everybody pays it, not just some people, selected based on a particular ideology that only people in properties with a greater value should pay?

This explanation is illogical and unfair on so many levels.

It's clearly just designed to disguise what is essentially just another of the wealth taxes the DA seems to love so much in Cape Town. Obviously, their aim is to extract and protect the amount of profit they get out of electricity provision. It would be far more honest to rather put the money onto our rates, not try and hide what they want to take in water and electricity charges.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
6,039
#11
At 600 units per month, 0%
Every unit above that the new system will cost you less
Every unit below will cost you more
Not exactly how I understand it. Regardless of whether you use 600 units or less, if your property is valued greater than R1m, you must pay the R150 "Home User Tariff". Units will cost less though, to account for the fixed cost per connection component now being directly charged.
 

garp

Executive Member
Joined
Aug 2, 2004
Messages
6,039
#12
What exactly is reasonable about that? I don't pay extra for a loaf of bread at Pick 'n Pay because my house is worth more than R1 million, so I don't see why I should have to pay more for electricity on the same basis. It costs the city the same to deliver electricity to a R400 000 house as it does to a R2 million house. The cost of a service should be based on what it costs the supplier to deliver the service, not on the assumed wealth of the customer.
Exactly. We all pay exactly the same for everything else, the only difference here is that the city happens to also have a convenient, if often misleading, gauge of your "wealth" (i.e. your property value) so they can apply their particular brand of socialist ideology (or just plain greed) to how much more they think they can charge you.
 

Archer

Honorary Master
Joined
Jan 7, 2010
Messages
21,032
#13
Not exactly how I understand it. Regardless of whether you use 600 units or less, if your property is valued greater than R1m, you must pay the R150 "Home User Tariff". Units will cost less though, to account for the fixed cost per connection component now being directly charged.
Let me rephrase then
If the property is worth more than R1mil the following applies:
At 600 units per month, 0% increase
Every unit above that the new system will cost you less
Every unit below will cost you more - some comparisons below on the effective increase of this scenario:
100 units - 60%
300 units - 12%
500 units - 2.3%
 

deweyzeph

Executive Member
Joined
Apr 17, 2009
Messages
6,424
#14
Let me rephrase then
If the property is worth more than R1mil the following applies:
At 600 units per month, 0% increase
Every unit above that the new system will cost you less
Every unit below will cost you more - some comparisons below on the effective increase of this scenario:
100 units - 60%
300 units - 12%
500 units - 2.3%
Does that mean that if your house is valued at more than R1 million a month you might as well buy 600 units a month regardless of whether or not you need to?
 

saturnz

Honorary Master
Joined
May 3, 2005
Messages
11,492
#15
Does that mean that if your house is valued at more than R1 million a month you might as well buy 600 units a month regardless of whether or not you need to?
lol, you will struggle to find houses for under R1m when 23m2 flats are going for 1m

this effectively applies to a large percentage of occupied properties
 

Archer

Honorary Master
Joined
Jan 7, 2010
Messages
21,032
#16
Does that mean that if your house is valued at more than R1 million a month you might as well buy 600 units a month regardless of whether or not you need to?
If for some strange reason you want to get best value for money, instead of simply saving that money, then I guess so. Bit of a weird thing to do, but to each their own I suppose
 

Lupus

Honorary Master
Joined
Apr 25, 2006
Messages
10,891
#17
Wait how does it currently work for electricity in CPT? In JHB if you're not prepaid regardless of property value, you've got the connection fee + the service fee think it totals up to almost R500, that's before you've even used a watt.
 

supersunbird

Honorary Master
Joined
Oct 1, 2005
Messages
43,512
#18
What exactly is reasonable about that? I don't pay extra for a loaf of bread at Pick 'n Pay because my house is worth more than R1 million, so I don't see why I should have to pay more for electricity on the same basis. It costs the city the same to deliver electricity to a R400 000 house as it does to a R2 million house. The cost of a service should be based on what it costs the supplier to deliver the service, not on the assumed wealth of the customer.
That's not socialist enough
 

signates

Expert Member
Joined
Dec 8, 2009
Messages
3,795
#19
Wait how does it currently work for electricity in CPT? In JHB if you're not prepaid regardless of property value, you've got the connection fee + the service fee think it totals up to almost R500, that's before you've even used a watt.
I'm not on prepaid and only pay for usage. No connection fee or service fee. This is directly from CoCT.
 
Top