2 April 2008

By Emily Visser

RESIDENTS will have to make far-reaching lifestyle changes, using less water and electricity and doing more recycling, if they want to keep their heads above water in future.

The City of Johannesburg released its proposed tariffs for water, electricity and refuse removal for the 2008-09 financial year with one plan in mind - to encourage a greater savings culture.

In future, tariffs will be determined on consumption, with heavy users being penalised.

Parks Tau, the member of the mayoral committee for finance and economic development, explained that the City believed that users of services must pay for their consumption. "High consumers must pay higher tariffs than low consumption users. This approach will encourage both residential and commercial consumers to reassess their consumption patterns, introduce conservation measures and cut down on the wastage of scarce resources."

He was speaking on announcing the new tariffs.

In addition, the 6 000 litres of free water each month enjoyed by all will fall away to all but those on the City's indigent register. It is proposed that households that are able to afford water should be charged at a unit price of R2,50 for the first six kilolitres and according to a step tariff for subsequent consumption.

The free water allowance for indigents will rise to 10 000 litres a month.

Consumers using below 15 000 litres will see no increase in their bills for the next financial year; but big water consumers will be hit the hardest. Water usage of more than 15kl will be tied to the CPIX, the consumer price index excluding mortgage rates, with an additional percentage increase charged as the amount of water used increases.

CPIX was 9,4 percent on Wednesday, 26 March, with many economists believing inflation could escalate further in months to come. This is way above the Reserve Bank target of 3 percent to 6 percent.

The City has had an increase of more than 22 percent in electricity input costs as a result of bulk purchase costs from Eskom and Kelvin Power Station. To absorb these costs, an overall 19 percent increase in electricity tariffs can be expected. In addition, a demand side management tariff of 23 percent is proposed for the winter months.

Yet again, indigents will be assisted as the City proposes to increase their free electricity bundle from 50kWh to 100kWh a month. The free electricity threshold for users who can afford electricity has been decreased from 1500kWh to 500kWh.

The 2c per kilowatt-hour penalty tariff announced by the minister of finance in the 2008 budget speech has not yet been factored in as the City is awaiting guidelines for its implementation.

Refuse removal tariffs will be changed to a structure based on the property's value, with three different property value thresholds proposed. In the past, tariffs were based on erf size. Refuse removal charges will, however, not exceed the threshold of R130, irrespective of the value of the property.

To improve cleanliness in public spaces and inner city areas and to assist with by-law enforcement, an additional city cleaning levy of R10 will be billed to all households and businesses, starting from the new financial year.

The public has time to comment on the proposed draft budget and council approved tariffs for the 2008-09 financial year, from 28 March to 30 April.

Tau said the time had come for consumers to reassess their use of scarce resources and to make real contributions to Johannesburg's unique climate change challenges. Tariffs were the only effective economic instruments with which to change consumer behaviour over the long term.

"As a City we have to set realistic tariffs for these services against the backdrop of an increased demand on limited and fast depleting resources."

National electricity supply shortages are just one of the challenges. Others are the projected shortage of water by 2025 and the rapidly depleting space for landfills. More than 80 percent of the revenue received from the tariff increases will go towards the City's operational budget.

Source: Joburg.org.za