Tariff Policy

1. Introduction

The aim of the tariff policy is to ensure that tariffs are calculated annually within the parameters of a pre-determined set of rules/principles which has been approved by the Council and which are in line with relevant legislation:

2. The following principles, to be used during the calculation of tariffs, are proposed:

- In terms of the Constitution and other relevant legislation, essential services must be made available to everybody within the Municipal area of jurisdiction, at the lowest possible tariffs required to sustain the necessary levels of service.
- In order to accomplish the aforesaid, life-line tariffs will have to be levied with the proviso that they pertain to household use only.
- The implementation of life-line tariffs necessitates, where possible, the creation of stepped tariff structures.
- With regard to undeveloped land it is believed that the levying of an "availability charge" should be levied.
- For ease of administration, and also for ease of understanding and acceptance by users, the tariff structure must be as simple as possible.
- For water and sewerage services life-line tariffs must be determined on the basis contemplated in the Water Supply and Sanitation Act, that is by excluding the capital cost of the service.
- A uniform tariff structure approach can only be adopted if the achieving of uniform service standards are seen as a priority.
- In circumstances where life-line tariffs are still unaffordable, a social welfare mechanism was introduced whereby the State assumes responsibility for the payment of such tariffs in the form of a subsidy (equitable share).
- Everybody must pay for services received. This means that the concept of free service provision is not supported.
- For the electricity service, the tariff structure must take cognisance of the requirements of the municipality and the National Electricity Regular South Africa (NERSA) and the solution must be acceptable to both parties. It will be necessary for the NERSA to approve all categories of electricity tariffs as a final stage before promulgation and it is essential that this requirement be foremost in any consideration.
- Tariffs must take into account the cost of the service, the level of the service, the extent to which the service is being used and the ability to pay for the service.
- Cross subsidisation between the different categories of users of a service will take place, as well as between the difference services.