As of 1 July 2017 approximately 40 000 customers with property values between R400 000 and R1 million were moved from the subsidised Lifeline Tariff to the Domestic Tariff to ensure that the City is able to assist those who are truly vulnerable in a sustainable manner. Read more below:
This is the final phase of the migration to the Domestic Tariff which has been taking place over the last few years to guarantee that only our most financially vulnerable customers are subsidised. This will ensure that the City of Cape Town is run in a sustainable manner.
Only households that meet the following criteria now qualify for subsidisation via the Lifeline Tariff:
• Municipal property valuation less than R400 000
• Consumption is less than 450kWh a month on average
• Premises supplied via a prepaid meter
*Customers who are in receipt of a pensioners’ or disabled persons’ rates rebate will still be able to apply for the Lifeline Tariff irrespective of their property valuation, provided their average monthly consumption is less than 450kWh including any free electricity that may have been provided.
‘The Lifeline Tariff does not exist as a reward for more conservative electricity consumption. It is there to assist vulnerable customers in accessing electricity. Historically, consumption levels were a reasonable indication of wealth and as such this measure was used to determine who had access.
‘However, over the last number of years the adoption of alternative technologies such as gas for cooking and solar water heaters have resulted in this no longer being an accurate measure on its own and it is leading to cases where customers who can more easily afford to pay are being subsidised by those for whom it is more difficult. It was therefore decided to amend the tariff policy to ensure as best as possible that only those customers who are financially vulnerable qualify for subsidisation by the rest of the customer base.
‘All tariffs are still primarily based on a consumptive charge and thus the incentive remains for all users to reduce their consumption,’ said Councillor Johan van der Merwe, the City’s Mayoral Committee Member for Finance.
Please see http://resource.capetown.gov.za/cityassets/Files/Tariff_increases_from1July17.pdf for more information on the key tariff changes in general.