Electricity - What You Pay For

Electricity - What You Pay For

Overstrand Municipality

Electricity - What You Pay For


There is some confusion regarding the different electricity tariffs applicable to municipal consumers.

Hopefully this guide will be useful to Overstrand residents.

Ratepayers will receive an account statement once a month, inclusive of all relevant charges for services that might be applicable to a particular property.

A basic charge for electricity forms part of the electricity tariff structure because the costs in rendering the service must be recouped. The basic charge therefore includes fixed and overhead costs as well as the capital costs for replacement/renewal of electricity infrastructure. (for which the Overstrand Municipality is responsible).

The basic charge is applicable on vacant erven as well, as infrastructure coverage has been put in place and the service is readily available.

In addition, an infrastructure levy was implemented a number of years ago to repay a once-off loan taken up by the municipality, for upgrading of the electricity network infrastructure.

The Overstrand is largely regarded as a holiday destination with a substantial number of holiday homes and vacant erven. If the basic charge were not in place to balance fixed and overhead costs, the price per unit consumed would have to be increased substantially.

In this instance, the permanent residents, who consume electricity on a monthly basis, will have to pay much more for their electricity consumption, thereby subsidising consumers who only occasionally consume electricity and vacant erven. Basic charges is an equitable way of ensuring that everyone shares in the costs for the provision of the service.

Based on the tariff structure, residents should also keep in mind that the municipality must budget for adequate revenue to enable us to sustain our electricity service provision to the community.

Thus the principle applied of the determination of the cost of rendering the electricity service to residents of the Overstrand.

The interest and repayment of loans taken up, or that will be taken up in the future, with regards to capital projects for a specific area during a particular budget year, is likewise recovered from all ratepayers.

The above-mention serves as an example that the rendering of an electricity service to our community does not entail paying Eskom for units and calculating the profit that could possibly be added to this tariff, to enrich the municipality. The total operational costs in rendering the service must be recognised.

Residents need to be aware of the fact that infrastructure network to the tune of R523.4 million (R1 billion before depreciation), must be maintained by means of pro-active maintenance to prevent power cuts. Replacement and/or refurbishment and expansion of these networks are critical in ensuring that the network does not fall into disrepair.

Also keep in mind that only technically qualified and competent municipal staff can work on the electricity network.

Over and above the basic charge, sliding scale electricity tariff for credit meters and prepaid meters can be viewed on the municipal website, www.overstrand.gov.za; click on the tab for Strategic Documents then Budget, scroll down to Annexure C (Rates and Tariffs).

Monthly basket of Electricity tariffs 2020/21 for single residential households after NERSA approval:

High Consumption with credit electricity meter (1500 kWh)

2019/20 R3 849,89 vs 2020/21 R4 089,35

6.22% Increase = R239,46

High Consumption with pre-paid electricity meter (1500 kWh)

2019/20 R3 685,88 vs 2020/21 R3 915,14

6.22% Increase = R229,26

Medium Consumption with credit electricity meter (800 kWh)

2019/20 R1 980,84 vs 2020/21 R2 104,05

6.22% Increase = R123,21

Medium Consumption with pre-paid electricity meter (800 kWh)

2019/20 R1 889,28 vs 2020/21 R2 006,79

6.22% Increase = R117,51

Low Consumption with credit electricity meter

2019/20 R1 446,83 vs 2020/21 R1 536,82

6.22% Increase = R89,99

Low Consumption with pre-paid electricity meter

2019/20 R1 375,96 vs 2020/21 R1 461,55

6.22% Increase = R85,58

Electricity - What You Pay For

Overstrand Municipality

In the background, though, a top performer - Overstrand Municipality - labours relentlessly to ensure this treasure trove’s clockwork ticks over smoothly. Providing municipal services to an area exceeding 1708 km2 with a population well in excess of the estimated 74500 souls is no easy feat, as th...

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