‘How this is done is that we say how much will it cost us firstly to maintain our infrastructure. That's the network charge. Then the service charge is towards the fixed cost that we pay,’ says Nqobani Mzizi, senior manager, revenue enhancement, at City Power.
You can also listen to this podcast on iono.fm here. ADVERTISEMENT CONTINUE READING BELOW JEREMY MAGGS: If you use prepaid electricity, you’ll want to listen to this. Johannesburg residents must now pay a R200 surcharge for prepaid electricity, along with increased tariffs. The updated prepaid tariffs are structured in tiers with costs ranging from R2.72 to R3.62 per kilowatt hour, depending obviously on usage.
Therefore, we are saying now that everyone must contribute towards that kitty because if what they’ve been paying is only just consumption, which is money that goes to Eskom, and nothing else for any other fee. So that’s the rationale behind this. Again, I say this not to trivialise the amount, Jeremy, to say that it’s low, of course from zero to R200 is quite significant in the current economic climate. But when compared to other domestic customers who are on conventional tariffs, they pay in excess of R700, R800, whether they consume or not.
So had we continued in this way, we would’ve definitely found ourselves in even bigger trouble, and years later it would’ve been a bigger hole and impossible to get out of. As it is right now, the R10 billion is a very tough challenge that we are facing. So the risk might be that of course people still need our service, so they are going to use the service. It’s just a matter of the quantum.
So it is quite a challenging business at this point, I must say to you, Jeremy, and the listeners, and all that we are just trying to do is to keep the business surviving because the service is essential.
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