Certain prepaid electricity users to lose lifeline status

The City of Cape Town intends moving all existing prepaid electricity customers currently on the subsidised lifeline tariff, but whose property value exceeds R1 million, to the domestic tariff, as from Saturday October 1.

The subsidised lifeline tariff is meant to help poor households that meet certain criteria:

* Their municipal property valuation is R300 000 or less.

* They use less than 450 kWh per month on average, including any free electricity.

* They have a prepaid electricity meter.

If a customer receives a senior citizen or disabled person’s rebate, in terms of the City’s rates policy or is registered as indigent, in terms of the credit control and debt collection policy, the property valuation and metering requirements stated above fall away.

Homeowners older than 60, whose household income is less than R12 000 a month, qualify for the senior citizen rebate and it is proposed, in the City’s draft budget for 2016/2017, to increase this limit to a household income of R15 000 a month.

The City says the migration will allow it to reduce the average tariff increase for 2016/17 to 6.62 percent instead of 8.26 percent.

“Price increases from Eskom are having a profound effect on the local economy.

With this in mind, it is important that only those customers who are truly indigent continue to be subsidised by other residents,” said deputy mayor Ian Neilson.

All similar customers with credit meters were moved to the domestic tariff on July 1 2014.

A public participation process on the City’s draft budget and the proposed tariffs, including the above proposal and property rates, is under way.