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2008-07-28: Statement by the mayor on the implementation of the Eskom additional electricity tariffs

STATEMENT by the Executive Mayor of Johannesburg, Councillor Amos Masondo, at the media briefing on the implementation of the Eskom additional electricity tariffs, Mayoral Parlour, Braamfontein - Johannesburg

The Speaker of Council: Clr Nkele Ntingane
The Chief Whip of Council: Clr Bafana Sithole
MMC for Infrastructure and Services: Clr Ross Greef
Members of the Mayoral Committee
Fellow Councillors
City Manager: Mr Mavela Dlamini
Managers and Officials of the Council
The Media

The City of Johannesburg will approve Eskom's additional electricity tariff of 20.6% at its next Council meeting on Thursday 31 July 2008, which will be implemented on the 1st of August 2008. This is an adjustment.

This increase is a direct result of the National Energy Regulator of South Africa's (Nersa) decision to allow Eskom to levy an additional increase of 13.3% on its customers on the already approved 14.2% increase.

In keeping with the aforementioned, the poor consumers will not experience any additional increase in tariffs. The implication of this will be a R68 million revenue loss to the City.

In our quest to ensure Demand Side Management (DSM), the following tariffs structure has been put in place:

Lifeline¬ - 14.2%;
Domestic single phase – 20.6%; 
Domestic three phase – 35.6%; and  
Commercial and industrial - 43.6%.
The various categories for electricity consumption, kilo Watt hour (kWh) per month are as follows:

0 to 300kWh - 14.2% increase that equates to three cents above the Council approved tariff. These customers will also receive100kWh of free basic electricity per month.
300 to 500kWh - the same increase of 14.2% in line with the principle of demand side step tariff. These customers will however not receive free basic electricity.  
500 to 1000kWh a 20,6% increase.
1000 to 2000kWh a 20,6% increase.
Prepaid consumers between 0 to 500kWh, 500 to 1000kWh and 1000 to 2000kWh get an additional increase of 11cents and 
Prepaid consumers from 3000kWh will pay 12cents more.
It is important to note that those who consume more electricity will pay more per unit.

During April 2008, the City embarked on extensive consultation process with the public before the Council approved tariffs in May for the 2008/09 financial year. The Local Government Municipal Finance Management Act (MFMA) 56 of 2003, Section 28 (6), states that “once new tariffs have been determined in respect of a financial year, these may not be further increased except when required in terms of a financial recovery plan as contemplated in the Act".

On the 27th of June 2008, the Cabinet approved a recommendation by the Minister of Finance, Trevor Manuel that municipalities should be exempted from public participation regarding the consideration of the additional Eskom tariff increase approved by Nersa on the 18th of June 2008.

In order to minimise tariffs increases that are higher than usual and preempt load shedding or similar problems, we would encourage the residents and citizens of Johannesburg as well as businesses to go an extra mile and take relevant steps to conserve energy.