Joburg to refund excessive electricity charges

The City of Johannesburg is expected to refund millions to residents who were charged twice the tariff increase for electricity.

The city imposed a 15.4% electricity price increase effective from July1 but yesterday announced that the increase had been dropped to 7%.

This was announced yesterday by Matshidiso Mfikoe of the mayoral committee for the environment, infrastructure and services.

Mfikoe said the National Energy Regulator of SA (Nersa) approved a 7% tariff increase for the city, in line with the municipal guidelines it issued in April.

Mfikoe and City Power CEO Sicelo Xulu said the city had no choice but to refund residents.

"The council sat down and decided to impose a 15.4% increase [while Nersa was deliberating on the increase] but now Nersa has responded with [a] 7% [increase], said Xulu.

"We [had] to implement [the increase] by July 1 and where there are refunds [owed to residents] those will be paid out."

Mfikoe and mayoral committee member for finance Geoffrey Makhubo announced measures to "alleviate the [electricity cost] burden on the customers" by lowering the demand-side management levy from 2c a kilowatt-hour (kWh) to 1c/kWh.

Prepaid business customers will be charged from 1kWh, residents from above 500kWh.

To encourage migration to prepaid electricity meters, the city successfully applied for a 0.39% prepaid tariff increase.

The city attempted to refute allegations that R1-billion had been siphoned off the municipality's sinking fund.

The executive mayor, Parks Tau, has been cleared by the city's integrity commissioner, advocate Jules Browde, of allegations of involvement in tender rigging.

It had been alleged that he irregularly benefitted from a contract awarded to a consortium in which his wife, Pilisiwe Twala-Tau, has a 1% shareholding.

The contract was for managing the city's R2-billion liability redemption fund.

Browde dismissed the claim as without foundation.

He found that Tau had made a full disclosure of his wife's interests in the city's register of councillors' interests.