FINANCE & ECONOMICS

The Tshwane Electricity Tariff Debacle

Craig Herbst, Technical Director, South Africa

14 August 2019

There is finally a way forward in Tshwane’s bungled electricity tariff review process for 2019/2020, which saw Afriforum blocking CoT’s attempts to completely restructure their tariffs. 

Whilst there is no doubt that these tariffs do need to be re-engineered to be more cost-reflective, Tshwane failed to follow the correct procedures to bring their new ideas into effect. Of major concern too was the fact that CoT appears incapable of communicating anything accurately – their website cannot be relied upon for factual tariff information, and the confusion around the mooted “fixed charge” (R200 or R56 or whatever number you stumble across) is unfortunately too typical.

NERSA have intervened, and pulled the plug on Tshwane’s grand plan. But its not all good news for consumers: they have approved an across the board 13.07% increase which, if my interpretation of news reports is correct, will be applied on a line-by-line basis to the 2018/2019 tariff.

Electricity costs are an emotive issue, and I can almost hear the ranting and gnashing of teeth from the residents of the Capital City at this news. But we need to accept that, corruption and maladministration aside, this city needs revenue to operate. As the primary income stream, electricity simply will not get less expensive.

“But its not all good news for consumers: they have approved an across the board 13.07% increase”

There has never been a better time for home and business owners to take decisive action. No, this is not a call for a tax boycott or blockading of roads or other nonsensical outlets of frustration. I am talking about the transition to solar power, where the economic sense of supplementing or completely replacing grid electricity is no longer disputed.

Conspiracy theorists, climate-change denialists and members of the anti-vaccination crackpot movement probably won’t get this, but anyone who understands the basics of investment will. The fact that grid-tied solar power systems can achieve payback in under 4 years, and that residential systems incorporating battery backup for power security can pay for themselves in under 8 years appears to be one of the best-kept secrets right now.

If you would like an accurate, scientifically-based proposal of how solar could work for you, please do make contact with the GreenHouse team – we’d be delighted to assist.

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