The City of Johannesburg (CoJ) is desperate for revenue collection but is not providing the basic services economically stretched residents want.
This is the sentiment of the general manager of the Johannesburg Property Owners and Managers Association (JPWMA) about the recently announced R200 surcharge for customers who use prepaid electricity.
Angela Rivers, whose association is embroiled in two legal battles with the city about refuse and sewage tariffs, said fighting the city this time will deplete their funds.
“We have spent R1.4m taking the council to court. We are not in a position to spend money on legal fees while we still have the two cases. It's been going on for two years and we haven't had a court date yet,” she said.
The prepaid fee was approved by the National Energy Regulator of South Africa (Nersa). This is on top of the 12.7% percent tariff increase it approved.
City Power said the R200 fee will go towards maintaining electricity infrastructure. Only indigent people, or customers earning less than R6,000 a month, are exempted from paying the fixed charge, which is R230 when VAT is added.
Johannesburg residents are also facing a raft of annual tariff increases. Property rates will increase by 3.8%, electricity by 12.7%, refuse by 5.9% and water and sanitation by 7.7%.
The city's group finance director for communications, Kgamanyane Maphologela, said the council approved the tariffs in May and this will start to reflect on municipal account statements at the end of this month.
Julia Fish, manager of JoburgCAN, an initiative of Outa, said it had tried to challenge the new service charge in the city’s integrated development plan and budget public participation processes but, while the city reduced the planned charge, it refused to scrap it.
Rivers said City Power initially wanted to set the fee at R530.
“We objected. I know a lot of people objected. They then brought it down,” she said.
Many cash-strapped residents cannot afford to pay the extra fee, she said, saying their association represented part of the affordable housing market and the amount is already contributing to a portion of family groceries.
“It is going to be a battle for them. The reality is the City of Johannesburg is desperate for money and they are looking for whatever ways possible to try to get money out of residents.”
She said residents often did not even get what they paid for.
“We have power outages within the inner-city and parts of Braamfontein haven't had power for two weeks. There are areas where Pikitup doesn't do its job. Joburg Water is the worst. Driving in Joburg you will see burst pipes. There is water leaking or there is no water at all. Emmarentia didn't have water all of last week.
“We are paying all the extra charges and your rates have gone up, your property was re-evaluated and you are hit with a double increase. What are they spending the money on?” Rivers asked.
Outa said the city should ensure it runs in a cost-effective manner.
“It cannot pass on costs to consumers due to its own inefficiencies. It consistently fails to address issues such as inadequate debt collection of conventional electricity tariffs and high electricity losses.”
Fish said the city is depending on its indigent register to apply its exemption policy to prepaid users but “there is reason to believe this register is significantly outdated and a lot of households which would be entitled to this subsidy are not registered.
“Despite multiple requests for information on the number of households on the city’s indigent register and therefore exempt from the fee, the city has not responded. The lack of transparency does not meet mandatory regulation compliance.”
Outa said the extra charge could force low-income families to choose between essential needs such as food, healthcare and electricity. It could also see them opt to go without power, impacting their ability to cook, or lead to more illegal connections.
“This not only poses safety risks but also exacerbates the problem of nonpayment and revenue losses for City Power.”
People are eating less to try to survive. This is shocking timing. The mayor seems to think everything is perfectly in order because he is getting his wonderful salary and doesn't feel it
— Stevie Colborne, Blairgowrie resident
A resident in Blairgowrie, Stevie Colborne, said the city should find the funds within its business model and appoint more competent management.
“They can’t expect us, who are financially crippled in a post-Covid economy, to find the extra R200 a month on top of the 12.72% increase they gave us. Never mind that everything is going up on our rates bills. Where are people supposed to find the money?” he asked.
“People are eating less to try to survive. This is shocking timing. The mayor seems to think everything is perfectly in order because he is getting his wonderful salary and doesn't feel it,” said Colborne.
Fish said a court challenge was a difficult situation because the city claimed it had conducted adequate public participation as part of the integrated development plan (IDP) and budget processes.
“We made a substantive submission to the process and rejected the tariff but it was not removed. Then it was voted for and approved by a majority in the city council. The overall tariffs were sent to Nersa and it approved them.
“Everything is in theory technically legal, despite a public outcry, despite that we don’t believe they properly informed people of the charge, specially the business charges people are facing on prepaid services,” Fish said.
She said Outa was testing its options and preferred to enter into a phase where it could “encourage the city to remove unfair charges ... But if the city and government are abusing the tax space and residents, we are always willing to take them on.”
Outa conducted a flash poll on its LinkedIn, X and Facebook social media account.
“In essence, of the 2,212 who responded across Facebook, X and LinkedIn, only 13% of people were aware of the increase, 69.3% of prepaid customers did not know about it and 17.4% knew of it but did not know how it would be implemented. Many people reported they remember the R530 proposed but were waiting for the opportunity to oppose it,” said Fish.
City of Joburg councillor Nicole van Dyk said her party did not support the surcharge but it was passed in the council. She said many residents objected during the IDP meetings.
“A lot of residents objected to the rates and tariffs but there are government departments which owe billions to City Power. Provincial and national departments owe significant funding and the only way to be fair would be to target them before residents,” she said.
Rein Snoeck Henkemans, MD of Alumo Energy, said the prepaid charge would affect 250,000 prepaid customers, seeing the city haul in about R50m each month.
“Moreover, Eskom is seeking an additional 36% tariff increase for 2025. This means municipal power customers could see a meteoric 43.5% hike in electricity costs.
“We examined the electricity costs incurred by an average household in June/July 2023 using an average of 1,000 units per month. These costs amounted to an average monthly bill of approximately R2,400 per month, or R2.46 per unit. When conducting the comparison in July 2024, taking into account the price increases, the same household, using the same number of units, is facing a monthly bill of R3,000 per month, or R3 per unit.”
He believes City Power's revenue collection went down because many residents switched to solar power. He said it seemed like they were trying to recuperate that from the end user when they should redo their budget and relook at different revenue streams.
According to Eskom’s Generation Adequacy Report, rooftop PV output has more than doubled in under two years, a trend that seems likely to continue.
“With the price increases and the continued instability of the grid in mind, it’s little wonder so many South Africans are making the move to solar. Infrastructure in Johannesburg hasn’t been properly maintained. Citizens were almost forced to get solar because they didn't have power during load-shedding.
“It is not fair. The city is not providing power and has load reduction, which in my mind is the same as load-shedding. This is not an end user problem. He pays his rates and taxes, he pays his bills, but the city can't give him reliable power. And now the city also wants to charge R200 extra,” Henkemans said.
“It’s time for accountability. South Africans deserve better than to be left out in the cold by the power plays at Eskom, City Power and Nersa, entities meant to serve them but marked by incompetence and opportunism.”
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