Otis Singleton
Understanding how electricity tariffs work is crucial for managing your energy costs effectively. In Ekurhuleni, electricity tariffs are determined by the City of Ekurhuleni or Eskom, depending on their respective licenses to provide electricity in specific areas. The City's tariffs are categorized based on different residential circumstances and consumption levels, with the Inclined Block Rate Tariff being the most common for residents. This tariff structure consists of blocks with increasing prices as monthly consumption rises. Additionally, the cost per unit at the primary meter is set by the municipality, while the secondary meter cost is determined by the meter supplier. Understanding these tariff structures and how they apply to your usage patterns is essential for optimizing your energy expenses.
| Characteristics | Values |
|---|---|
| Tariff types | Tariff A, Tariff B, post-paid, pre-paid |
| Tariff A cost per unit | Between 0-600 units: R2.67 per unit. Between 600-700 units: R4.54 per unit. Above 700 units: R12.80 per unit. |
| Tariff B cost per unit | R3.69 per unit regardless of consumption |
| Post-paid and pre-paid fixed monthly charge | R82.04 per month per point of supply |
| Cost per unit difference between primary and secondary meters | The cost per unit at the first meter is set by the municipality. The cost per unit at the secondary meter is set by the meter supplier. |
| Who installs primary and secondary meters | Municipality-appointed electricians install primary meters. Private electrical contractors install secondary meters. |
| Tariff structure | The Inclined Block Rate Tariff is the most prevalent tariff for residents. It is structured into blocks that increase in price according to monthly consumption. |
| Tariff blocks | First block: <100 kWh per month, free of charge. Second block: 100-600 kWh, R1.0566 per kWh. Third block: 600-700 kWh, R1.7961 per kWh. Fourth block: >700 kWh, R5.02 per kWh. |
| Tariff increase | From 1 July 2024, tariffs will increase by between 11.02% and 12.74% for various categories. |
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What You'll Learn
Post and pre-paid electricity
Ekurhuleni offers both post-paid and pre-paid electricity options. With post-paid electricity, you use the electricity and then pay for your usage at the end of the month. With pre-paid electricity, you pay-as-you-go. The cost of electricity is the same for both payment schemes.
The cost per electrical unit increases as more electricity is consumed. This tariff structure suits low-usage customers. Between zero and 600 units, you will pay R2.67 per unit. Between 600 and 700 units, you will pay R4.54 per unit. Above 700 units, you will pay R12.80 per unit.
Tariff B is different in that the cost does not increase with usage. This tariff suits users who consume more than 819 units in a month. The cost is R3.69 per unit, regardless of consumption.
Both post-paid and pre-paid options have a fixed monthly charge of R82.04 per month per point of supply. On post-paid, this charge is included in your monthly account, whereas, on pre-paid, it is deducted from your first monthly purchase.
Primary meters are installed at your electrical point of supply from the municipality and are fitted by municipality-appointed electricians. Queries regarding primary meters should be directed to your local municipal offices. Secondary meters are not a municipal function and are installed by private electrical contractors in cottages, for example. They record the amount of electricity consumed by the cottage.
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Tariff categories
There are five tariff categories: residential, urban, rural, municipal, and generator tariffs. Residential tariffs are for household electricity supply and include Homelight 20A, Homelight 60A, Homepower, and Homeflex tariffs. Customers with solar-rooftop PV are required to be on a Homeflex tariff. Urban tariffs are for large industrial and mining concerns, as well as medium to large commercial and institutional concerns in areas classified as urban. Rural tariffs are for agricultural customers, businesses, and households located in rural areas with varying electricity supply capacities.
Municipal tariffs are for municipalities purchasing electricity in bulk and for smaller connections to supply municipal operations like water pumps and offices. These include Municrate, Municflex, and Public Lighting tariffs.
In addition to these categories, there are also Tariff A and Tariff B, which refer to post-paid and pre-paid electricity. With post-paid, you use electricity and then pay for your usage at the end of the month. With pre-paid, you pay as you go. The cost per electrical unit will increase as more electricity is consumed, making this tariff suitable for low-usage customers. Tariff B has a fixed cost per unit regardless of consumption, making it suitable for users who consume more than 819 units in a month.
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Cost per unit
The City of Ekurhuleni's electricity tariffs are categorised to fit different circumstances of residents and businesses, such as residents in stand-alone homes, complexes, and flats. The most prevalent tariff for residents is the Inclined Block Rate Tariff, which is structured into blocks that increase in price according to monthly consumption.
The first block is for consumption of less than 100 kWh per month, which is free under the City's Free Basic Electricity policy. The second block is for consumption between 100 kWh and 600 kWh, with a tariff of R1.05,66 per kWh. The third block, between 600 kWh and 700 kWh, is charged at R1.79,61 per kWh. Consumption above 700 kWh is charged at R5.02 per kWh.
The City of Ekurhuleni also offers Tariff A and Tariff B. Tariff A is suitable for low-usage customers. Between zero and 600 units, the cost per unit is R2.67. From 600 to 700 units, the cost is R4.54 per unit, and above 700 units, the cost is R12.80 per unit. Tariff B is suitable for users who consume more than 819 units in a month, with a consistent cost of R3.69 per unit regardless of consumption.
It's important to note that the cost per unit at the primary meter is set by the municipality, while the cost per unit at the secondary meter is determined by the meter supplier. Secondary meters are typically installed in cottages and record electricity consumption separately from the primary supply.
Ekurhuleni's tariffs are subject to change and have been adjusted in the past to accommodate rising operational costs, support infrastructure improvement, and promote responsible consumption.
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Primary and secondary meters
In Ekurhuleni, electricity tariffs are calculated based on whether you have a primary or secondary meter, as well as whether you are on a pre-paid or post-paid payment scheme.
Primary meters are installed at the electrical point of supply from the municipality by municipal electricians. The cost per unit of electricity at the primary meter is set by the municipality.
Secondary meters, on the other hand, are installed by private electrical contractors and are often used in cottages to record the electricity consumed. The cost per unit of electricity at the secondary meter is set by the meter supplier.
The main difference between primary and secondary metering is the voltage at which they are installed. Primary metering is installed on high-voltage distribution lines, whereas secondary metering is installed on lower-voltage lines. This means that the metering equipment for primary metering is bigger to accommodate the higher voltage.
Another difference is that primary metering provides a single bill for the total usage, whereas secondary metering allows for monitoring the usage of each transformer or individual, which can be useful for landlords of apartment complexes to ensure tenants are paying their fair share.
Both primary and secondary metering can be used to meter a customer's service, and the choice between the two depends on the specific needs and setup of the customer.
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Fuel and non-fuel costs
Fuel Costs
Fuel costs are a significant factor in electricity tariff calculations, and they can vary based on the type of fuel used for electricity generation. For instance, in Peninsular Malaysia, coal is the primary source of electricity generation, so fluctuations in coal prices directly impact the electricity tariffs. The global fuel crisis, which began in late 2021, caused coal prices to surge, affecting the ICPT and, consequently, electricity tariffs.
Non-Fuel Costs
Non-fuel costs refer to expenses unrelated to the direct cost of fuel but are still essential in electricity generation and supply. These include costs associated with Power Purchase Agreements (PPAs), Service Level Agreements (SLAs), and fuel procurement contracts. Changes in these non-fuel costs are captured through the Generation Specific Cost Pass-Through component, which is then reflected in the electricity tariff adjustments under the ICPT mechanism.
Tariff Categories
Electricity tariffs can be categorized into different groups, such as residential, urban, rural, municipal, and generator tariffs. Residential tariffs are designed for household electricity supply, while urban tariffs cater to large industrial, mining, and commercial entities in urban areas. Rural tariffs are meant for agricultural customers and businesses in low-density rural regions. Municipal tariffs, on the other hand, are for municipalities purchasing electricity in bulk or for smaller connections to supply operations like water pumps and offices.
Metering and Consumption
The cost per unit of electricity consumed is determined by metering. Primary meters, installed by municipalities, have their costs set by the local municipality, while secondary meters, often found in cottages, have costs set by their respective meter suppliers. The electricity tariff increases with higher consumption, incentivizing lower usage. This is evident in tiered tariff structures, where the cost per unit rises as consumption crosses certain thresholds.
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Frequently asked questions
This is the most prevalent tariff for residents. The tariff is structured into blocks that increase in price according to the monthly consumption of a household. The first block of less than 100 kWh per month is free. The second block, between 100 kWh and 600 kWh, is charged at R1.05,66 per kWh. The third block, between 600 kWh and 700 kWh, is charged at R1.79,61 per kWh. Finally, consumption above 700 kWh is charged at R5.02 per kWh.
Primary meters are installed at your electrical point of supply from the municipality by municipality-appointed electricians. The cost per unit at the first meter is set by your municipality. Secondary meters are installed in cottages, for example, and record the electricity consumed by that cottage. They are installed by private electrical contractors, and the cost per unit is set by the meter supplier.
With post-paid electricity, you pay for your usage at the end of the month. With pre-paid, you pay-as-you-go. The cost of electricity is the same for both payment schemes, and there is a fixed monthly charge of R82.04 per month per point of supply.
