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The City of Cape Town intends moving all existing prepaid electricity customers currently on the subsidised Lifeline tariff, but whose property value exceeds R1 million, to the Domestic tariff as from 1 October 2016. Read more below:

The Lifeline tariff is a subsidised tariff aimed at providing support to poor households. In terms of the tariff structure, only households that meet the following criteria qualify for this subsidisation:

· Their municipal property valuation is R300 000 or less and

· They use less than 450 kWh per month on average, including any free electricity and

· They have a prepaid electricity meter

If a customer receives a senior citizen or disabled persons rebate in terms of the Rates Policy or is registered as indigent in terms of the Credit Control and Debt Collection Policy, the property valuation and metering requirements stated above fall away.

Homeowners over the age of 60 whose household income is less than R12 000 per month currently qualify for the senior citizen rebate and it is proposed, in the City’s draft budget for 2016/2017, to increase this limit to a household income of R15 000 per month.This migration of those currently receiving subsidised electricity but who do not meet the criteria for this subsidy will allow the City to reduce the average tariff increase for 2016/17 to 6,62% as opposed to 8,26%.

‘Price increases from Eskom are having a profound effect on the local economy. With this in mind, it is important that only those customers who are truly indigent continue to be subsidised by other residents,’ said the City’s Executive Deputy Mayor, Alderman Ian Neilson.

All similar customers with credit meters were moved to the Domestic tariff on 1 July 2014.

A public participation process on the City’s draft budget and the proposed tariffs, including the above proposal and property rates, is currently under way.

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