Saturday, 1 May 2010

Cape Town’s new tariffs and charges (rates and taxes and electricity)

{Extracted from CityNews April 2010} The proposed new tariffs and service charges are set out in the draft budget. Water and sanitation charges will increase in line with inflation. However, electricity tariffs have risen sharply due to the Eskom increases, and solid waste removal charges have also risen to pay for new landfill and transfer station infrastructure.

Water and sanitation charges will increase in line with inflation, and property rates increases are in some cases below inflation. However, electricity tariffs have increased sharply due to the City being obliged to pass on the tariff increases granted to Eskom by the National Energy Regulator. Solid waste removal charges have risen to pay for new landfill and waste transfer station infrastructure.

The proposed service charge increases, given in the tables are:
• The property rate has dropped to 0,531 cents in the rand
• An average increase of 10% for water and sanitation
• An increase of 18% for solid waste removal
• An increase of 38,5% for solid waste disposal
• An average increase of 24,6% for electricity, based on Eskom’s increase of 28,9% for this year
• The first R200 000 of your property’s value is rates-free.

Water and sanitation tariffs 
Please note that the City has increased the number of billing categories, or ‘steps’, for water and sanitation.
These new steps are better suited to the volumes people actually use.
The first ‘Step 1’ – the free basic allocation – remains unchanged, but bigger volumes have been allocated into smaller blocks. The tariffs proposed in the budget relate to the new steps shown alongside.


Solid waste tariffs
There is a new charge, for ‘clean’ builder’s rubble. image

Electricity tariffs  image

These remain in three broad categories:
Lifeline’ – which caters for poorer people and has no service charge,
Domestic Low’ – with no service charge, and
Domestic High’ – which does have a service charge.

Examples of actual costs in each of the categories are given in the tables alongside.

How the electricity tariffs work
The tables below show what customers can expect to pay for electricity at the proposed new tariffs, and the examples explain what portion of purchases is made up of the free allocation, at the subsidised rate and at the normal rate.

Examples at the LIFELINE energy rate
• Person A buys R240 (including VAT) worth of electricity once per month.  For each purchase, he will receive 366,3 kWh, made up of 50 kWh free, 100 kWh at the subsidised rate, and 216,3 kWh at the normal rate.
• Person B buys R60 (including VAT) once a week. For the first purchase in the month he will receive 50 kWh free, and 90,6 kWh at the subsidised rate – a total of 140,6 kWh. On his second purchase he will receive 9,4 kWh at the subsidised rate and 66.9 kWh at the normal rate – a total of 76,3 kWh.  For the third and fourth purchase of the month he will receive 74,7 kWh – all at the normal rate. If one adds all four purchases together, he also receives 366,3 kWh in the month, the same as Person A.
• Person C normally buys R200 (including VAT) once a month.  For this he will receive 316,5 kWh made up of 50 kWh free, 100 kWh at the subsidised rate, and 166,5 kWh at the normal rate. However, in this particular month, Person C requires a small top-up amount and buys R40 worth of electricity.  Person C will receive 60,4 kWh for this purchase – charged at the normal rate – bringing the total energy purchased in the month to R240 – 366,3 kWh in total.image

Examples at the DOMESTIC LOW energy rate

This tariff is relatively simple. Whatever energy is purchased, the tariff remains the same and the value is a simple multiplication of tariff x units (kWh) purchased.

Examples at the DOMESTIC HIGH energy rate
• Person D buys 500 kWh of electricity four times a month. His normal account will contain two components: an energy charge to the amount of R455,85 and a service charge of around R52,50 for the week (seven days are used here – actual value will depend on the exact length of time between purchases).  Both of the purchases in the month (if equally spaced) will be identical.
• Person E buys 2 000 kWh of electricity on the first of the month, resulting in an energy charge of R1 823,40, and a service charge of either R225 (for a 30-day month) or R232,50 (for a 31-day month).
• Person F buys electricity once a year. He uses 24 000 kWh in the year, and will therefore pay R21 880,80 for energy for the year. He will also pay the service charge for 365 days, which will total R2 737,50 for the year.
Please note that the service fee is a daily fee and works out to be the same amount over a year, whether you buy once a week, once a month, or once a year.

• For more information, contact the City’s call centre on 0860 103 089.

HTT comments:
Prices will increase on 01Jul 2010.  Pre-Paid customers: see this article to see if it’s worth while to do a bulk buy purchase ahead of the increase: If you have a pre-payment meter: FAQs answered by Eskom on radio 567CapeTalk and Saving 24.8% by loading your pre-payment electricity meter
Did you notice the 93.5% in the daily service fee for Domestic High users?  From R3.88 to R7.50 per day! That’s from R116 per month to R225, or from R1,416 per annum to R2,736 (gulp).
BTW: you are a ‘Domestic High’ user if you use more than 800 kWh per month (average).  See here for more info: Cape Town Electricity Tariffs

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