City Power explains why it charges some customers more than others
City Power CEO Tshifularo Mashava has explained a phenomenon in which customers reload their prepaid electricity meters, only for the power utility to charge them a fixed fee of about 50% of their initial amount.
This comes amid complaints about the high cost of units beyond the R200 surcharge on prepaid electricity for residential customers, introduced last year.
Mashava explained in a media briefing on Tuesday why the power utility has been charging some customers more than others.
ALSO READ: New tariff structure may raise costs for some Eskom users
'With prepaid customers, we charge a basic fee of about R200, whereas we charge the post-paid customers about R900,' said Mashava.
'Last year, we needed to validate meters. In that process, we obviously discovered customers who had bypassed their meters or whose meters were vandalised. We corrected this from around December, January and February.
'For those customers whose meters were vandalised between July last year and February this year, or bypassed their meter, when we then installed the new meters, it meant that we would then have to recover the basic charges of the previous months. This has happened for a number of customers.
ALSO READ: City Power says load reduction is 'vital'
'We will continue to issue communication around that, and we will engage with the affected customers. If you have not paid the R200 in the six months of 2024, it means that when you buy your tokens in 2025, we will then recoup that money. The system is programmed to recover all the amounts from July.'
City Power vs Eskom dispute
In May last year, Eskom approached the High Court in Johannesburg in an attempt to get City Power to settle its debt.
This was after the utility started to default on its payments from October 2023.
When the matter was heard on 4 June 2024, the amount owed to Eskom was R3.4 billion.
The amount relates to bulk electricity that Eskom supplied to the City of Joburg. The bulk electricity supply is in terms of Electricity Supply Agreements binding between Eskom and the City of Joburg.
The High Court ordered the City of Joburg and City Power to pay R1.073 billion, including interest, for the unpaid electricity account.
However, on Tuesday, Minister of Electricity and Energy Dr Kgosientsho Ramaokgopa said his department intervened in the matter and pulled both parties from the court process.
ALSO READ: City Power launches free basic electricity drive for Joburg residents: Here's who qualifies
'We shouldn't be burdening the courts with matters that can be resolved between the parties. We pulled them out of the court process. I don't think we should be burdening the judges with making a determination on issues that are really of a technical nature and can be easily resolved,' said Ramokgopa.
'This particularly taxing exercise required cool heads and a degree of maturity for us to be able to settle disputes that go as far back as 10 years. The quantum of money involved runs into tens of millions of rand. If they were not to be amicably resolved, they were, over a period of time, going to endanger the financial sustainability of City Power and, over a period, the sustainability of Eskom.'
Settlement
Ramokgopa announced that City Power, the City of Joburg and Eskom had reached a settlement, where the two would settle their debt over four years.
'This is a big ticket of R3.2 billion. Of course, this amount has been a subject of dispute. City Power wants to emphasise that they have done everything possible to maintain paying the main account despite all these difficulties,' said Ramokgopa.
'We have been able to write off that R830 million, they don't have to pay interest on that which is owed. Eskom has conceded with regard to the periods of load shedding, the estimations and penalties that have to do with notifiable maximum demand. So, all of those have been removed, totalling R830 million.'
He explained that the settlement will not affect the customers.
'It will not affect the tariffs,' he said.
READ NEXT: Eskom battles overloading and theft, 400 transformers replaced
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