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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.

For comments on the Draft Budget, please review the budget which is available on our website at, at subcouncil offices and at libraries and comment online at by 4 May 2018.

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