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Electricity price increase for Capetonians

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Electricity price increase for Capetonians

The Mother City will experience a hike in utility costs from July 2017

Last Update 13 April 2017

The City of Cape Town has published their 2017/2018 Draft Budget which suggests a price hike in utilities for properties valued at more than R1-million with a new R8.21-a-day electricity tariff, in effect from 1 July 2017.

The Draft Budget has, in depth, set out what it proposes to do, come July. A few of the most important points in the Draft Budget include:

  • Properties valued at more than R1-million and those who use old credit meters will receive a R250 (R8.21-a-day) electricity tariff.

  • Ratepayers in homes valued at more than R400 000 will lose their free basic water supply.

  • If households use fewer than 600-kWh of electricity in a month, they won't notice a difference in tariffs.

The proposed increase is an attempt to recover the cost to maintain the service which was previously included in the unit price of electricity. This would see lower- and middle-income areas experiencing a 2.8% increase instead of a 3.34% increase as experienced in other areas.

The Draft Budget differentiates between three residential tariffs; the Lifeline customers with municipal property valuation over R400 000 will be migrated to the Domestic tariff (impacting more than 44 000 customers). Domestic customers with municipal property valuations in excess of R1-million will move to Home User tariff along with all credit metered Residential customers (impacting over 200 000 customers).  

Importantly any customer who is currently consuming 600-kWh per month or more on average will not see an impact on the move because at this level both the Domestic and Home User Tariffs have the same monthly accounts.

The changes allow the residential tariffs to increase by an average 2.8% across all tariffs - these come as a preemptive approach to reduce the likelihood of having to increase it by 7% to recover the revenue from this category.

By Tarina Meiring

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