Explained: Why Some City Power Users Pay More Than Others

Electricity costs in South African cities, especially Johannesburg, have been rising steadily, with many residents questioning why some pay significantly more than others. The answer largely comes down to City Power tariffs, which vary based on consumption and billing methods. Understanding City Power tariffs is essential to grasp the key reasons behind these differences and how electricity pricing works in 2025.

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Understanding Electricity Tariffs and Usage Tiers

One of the main reasons some city power users pay more is the tiered tariff system employed by municipalities and Eskom. This system charges consumers based on how much electricity they use. For example, in Johannesburg, the City uses a block tariff system where:

• The first 350 kWh are charged at a lower rate (around R2.22 per kWh),
• Usage between 351 and 500 kWh is charged at a higher rate (approximately R2.71 per kWh),
• Any consumption above 500 kWh attracts the highest rate (about R3.23 per kWh).

Therefore, households consuming more than 500 kWh per month pay significantly more per unit of electricity. Since many Johannesburg homes consume around 900 kWh monthly, electricity providers bill a large portion of their usage at the highest rate, driving up their bills.

Prepaid vs. Postpaid Meters and Fixed Charges

The type of meter affects electricity costs. Prepaid users face different tariffs than postpaid customers. From July 2025, Johannesburg will split prepaid tariffs into “Low” and “High User” categories. High users will pay higher energy charges plus fixed fees over R550 monthly, even without using electricity. This will sharply increase their bills. Postpaid customers pay based on usage without large fixed fees, though they follow tiered pricing.

Impact of Eskom and Municipal Tariff Increases

Tariff hikes approved by the National Energy Regulator of South Africa (NERSA) also affect electricity costs. For the 2024/25 financial year, Eskom’s direct customers saw a tariff increase of about 12.74%, while municipal customers faced increases around 12.7%. Johannesburg’s City Power requested a similar increase of 12.7%, reflecting rising operational costs, bulk electricity purchases, and inflation.

These increases mean all users pay more, but those consuming higher volumes or falling into higher tariff blocks feel the impact more acutely. Additionally, Eskom’s proposed tariff changes for 2025/26, including a possible 36.15% hike and peak-hour pricing adjustments, could further widen the gap between low and high users.

Time-of-Use Tariffs and Consumption Patterns

Some electricity plans offer Time-of-Use (ToU) tariffs, where users pay less for electricity consumed during off-peak hours and more during peak periods. Consumers who shift their usage to off-peak times can reduce costs, while those who use electricity mainly during peak hours pay higher rates. This system encourages energy conservation but also creates cost differences based on when electricity is used.

Why Some Users Pay More: Summary

In summary, several factors cause some city power users to pay more than others:

• Higher consumption pushes users into more expensive tariff blocks.
• Prepaid users may face fixed charges and higher variable rates.
• Tariff increases by Eskom and municipalities raise overall costs.
• Time-of-Use tariffs affect bills based on usage timing.
• Infrastructure and operational costs are passed on through tariffs.

Understanding these elements helps consumers manage their electricity use and potentially reduce costs by conserving energy, shifting usage to off-peak times, or opting for more efficient appliances.

Managing Your Electricity Costs in 2025

As electricity tariffs continue to rise, it is essential for city residents to understand why their bills differ. By recognizing the impact of tiered tariffs, prepaid charges, and consumption patterns, users can take proactive steps to lower their expenses. Monitoring usage, adopting energy-saving habits, and staying informed about tariff changes will help consumers navigate the evolving electricity landscape in 2025.