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ELECTRICITY: Steep Increases For Big Consumers

 



Recent Western Cape Business News

Residents in Cape Town can expect to pay an average of 11% more for their domestic electricity use as from 1 July 2012. Users consuming more than 600 kWh will pay 18.7% more.

There are two general use residential tariffs in the City, the Lifeline and Domestic tariffs. As of 1 July 2012, the structure of the two tariffs – but not necessarily the values – will be identical. This means that their functioning will also be identical.

To qualify for the Lifeline tariff (which includes free basic electricity allocations), a customer has to “receive” 450kWh (1kWh = 1 unit in common speak) or less per month, on average. This essentially means that over a 12 month period, a customer needs to “receive” less than 5 400kWh in total. Electricity that is consumed, purchased or obtained free of charge is all referred to as “received”. Those who receive more than this cut-off amount in a year (i.e. those who receive more than 450kWh per month on average) are placed on the Domestic tariff.

The first 150kWh received in any calendar month is charged at the Block 1 tariff rate. For Lifeline customers, there is a further subsidy with the City paying for 50kWh of that first 150kWh (so the customer only pays for 100kWh of the 150kWh).

The next 200kWh that is received (so 150,1 to 350kWh) is then charged at the Block 2 rate; the next 250kWh (350,1 to 600kWh) at the Block 3 rate; and anything that is received above the 600kWh mark is charged at the Block 4 rate.

Simply put, the price per kWh increases with each successive block. The more you receive the more you pay, and the higher your average cent per kWh becomes. It is therefore wise to save electricity because lower consumption means lower tariffs.

Prepayment electricity consumers seeking to minimise the amount spent on electricity each month should buy no more than the amount of electricity that they anticipate they will use in that month – because excess electricity will be charged at a higher rate.

There is a common misconception that if a customer moves from, for example, Block 3 to Block 4, they’ll have to purchase all of their electricity at the higher Block 4 rate – but this is not the case. Only the electricity purchased in that particular block costs more, and any electricity received from the lower blocks is charged at that lower rate.

Tariffs are as follows:


LIFELINE (all values exclude VAT):

 

Block 1

kWh - 0 ->150kWh(the first 50kWh in a month is paid by City)

Amount per kWh - 64,93c/kWh

Year-on-year increase - 5,4%

 

Block 2

kWh - 150 – >350kWh

Amount per kWh - 89,95c/kWh

Year-on-year increase -11%


Block 3

kWh - 350 – > 600kWh

Amount per kWh - 118,11c/kWh

Year-on-year increase - 9,9%


Block 4

kWh - 600+ kWh

Amount per kWh - 140,18c/kWh

Year-on-year increase - 18,7%


 

DOMESTIC (all values exclude VAT):


Block 1

kWh - 0 – >150kWh

Amount per kWh - 113,2c/kWh

Year-on-year increase - 5.4%


Block 2

kWh - 150 – >350kWh

Amount per kWh - 118,11c/kWh

Year-on-year increase - 9.9%


Block 3

kWh - 350 – > 600kWh

Amount per kWh - 118,11c/kWh

Year-on-year increase - 9,9%


Block 4

kWh - 600+ kWh

Amount per kWh - 140,18c/kWh

Year-on-year increase - 18,7%


 
 
 
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