City Power, the electricity utility in Johannesburg, has unveiled a plan to enable residents with solar power setups to sell excess electricity back to the grid. The utility aims to implement feed-in tariffs, with rates set at 85.50 cents per kilowatt-hour (c/kWh) for residential users and 70.85 c/kWh for businesses and large power consumers. This initiative is expected to assist these customers in reducing their monthly electricity expenses.
The utility explained that the feed-in tariff structure would allow customers with photovoltaic (PV) solar systems to supply surplus power to the grid, consequently lowering their electricity bills. The approved feed-in tariffs for residential users and business or large power users with embedded generator systems up to 1 MW stand at 85.50 c/kWh and 70.85 c/kWh, respectively.
City Power did not specify the exact commencement date for the feed-in tariffs.
This announcement was part of a statement outlining the utility’s recently approved electricity tariffs by the National Energy Regulator of South Africa (Nersa), which came into effect on July 1, 2023.
Under the new tariff structure, City Power’s customers consuming up to 350 kWh of electricity monthly will witness an increase in the unit price to R2.10 (excluding VAT). Customers consuming more than 350 kWh will be charged R2.41 per kWh used.
City Power operates a prepaid tariff system based on the inclining block tariff methodology mandated by Nersa. The applicable tariff increases as monthly consumption exceeds predefined thresholds.
Additionally, all customers are subject to a network surcharge of 6c/kWh. Notably, residential customers are exempt from the Network Surcharge for the first 500 kWh consumed per month, while businesses and large power users face a 2% surcharge.
The utility emphasized that its application to Nersa took into consideration prevailing economic conditions, including the rising cost of living and post-pandemic recovery. The weighted average increase was limited to 14.97% to mitigate the impact of price hikes.
City Power stated that the increase was the outcome of extensive consultation with the public through processes such as the Integrated Development Plan (IDP), enabling residents to influence their municipality’s course. The utility also provided a breakdown of the percentage increase applicable to different categories of power users.
|Customer segments||Nersa application %||Approved %|
|Large Power User (MV-TOU)||14.56%||14.97%|
|Large Power User (LV-TOU)||14.83%||14.97%|
|Large Power User (MV-Demand)||14.67%||14.97%|
|Large Power User (LV-Demand)||15.51%||14.97%|
|Reseller Residential Conventional||14.97%||14.97%|
|Reseller Business Conventional||1.42%*||14.97%|
|Overall average increase||14.97%||14.97%|
|* The figure of 1.42% appears to be a typo as this brings the overall average increase to 13.46%, rather than 14.97% as reported by City Power. This figure must therefore be at least 16.54%|