As of 1 July about 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 of Cape Town is able to assist those who are truly vulnerable in a sustainable manner.
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 the City’s most financially vulnerable customers are subsidised. This will ensure that the City 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,” said Mayco Member for Finance, Johan van der Merwe.
He also indicated that 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 is leading to cases where customers who can easily afford to pay are being subsidised by those for whom it is 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 Van Der Merwe.
