Cheap Electricity for 10 days only! (Update: 20th June 2023)

It’s been a long time since we reminded you of this – but here we go – you only have 10 days until the price of electricity goes up by almost 18% (in the City of Cape Town at least). So get them whilst they are cheap!

Once again we’re bringing you some AMAZING news. If you are connected through your municipality (sorry, if you pay Eskom it’s already too late, you had your raise in March) you still have less than 10 days to buy your credits at 2022/23’s prices saving you 18%. Just like previous years, you have to be clever about it – otherwise you might end up spending more**

The rule is :

• you should buy units until you’re at the TOP of the BLOCK that you normally use
  • In Cape Town that’s easy – either it’s 600kWh or unlimited!
  • The blocks are determined by your municipality and possibly which ‘tariff’ you are on within your municipality.

Once again we want to answer the question – should I fill my tank before the price rise! YES YES YES!

But… it’s not as simple as filling your petrol tank before the monthly price change (this month – looks like it’s not worth the bother!). For your electricity it’s pretty much the same thing, but just imagine the Petrol pump charged you MORE if you bought over 100 litres in a month…oh and your tank is unlimited in size and doesn’t cost you anything to carry around! That’s what it’s like with prepaid meters, you can buy extra now, at the old rate, and then use them up after the price has risen – saving you money!

I’ll work on 2 examples for City of Cape Town – Home Users (this is most homes over R1m in value – you get charged a basic fee of R185 (+VAT) each month added to your levies):

Home Tariff: If you use less than 600kWh on average

• Before 1st July 2023 you should make sure you buy up to 600 units (@2.6284) = R1577 in the month of June 2023
  • So if you alread bought R1000, then buy another R577 before 1st July
  • If you already bought R500, then spend another R1077 before 1st July
• After 1st July, just buy what you need…

Home Tariff: If you use MORE than than 600kWh on average

• Before 1st July 2023 buy AS MUCH AS YOU feel comfortable doing*
  • If you normally use 800 units each month then you could buy 6 months of 200 units – i.e. 1200 units extra on top of the units I normally buy 800 – so 2000 units
  • Converting to Rands thats:
    • 600 units at R2.6284 = R1577 PLUS
    • 1400 units at R3.6272 = R5078
    • Total R6655 spent in June 2023
  • 6 months is just a guide, maybe you only want to put 1 month of cheaper units in the bank, or maybe you’re willing to go for a full year or more! It’s completely up to you
• After 1st July 2023 – continue buying 600 Units EVERY month – until you run out
  • On the new tariff of R3.0858 per unit – that means buying R1851 each month in order to use up all the Cheaper rate tokens you get each month
• Why does this work? —  you’re buying MORE units at R3.62 to replace units that you’d otherwise have to be R4.26 for… that’s why you have to keep buying the cheap units AFTER July. If you don’t keep buying your 600 units each month, you’ll have paid R3.62 for units that you could have paid R3.08 for!

For domestic the principals are the same, but the numbers are different:

Domestic Tariff: If you use less than 600kWh on average

• Before 1st July 2023 you should make sure you buy up to 600 units (@2.9830) = R1790 in the month of June 2023
  • So if you alread bought R1000, then buy another R790 before 1st July
  • If you already bought R500, then spend another R1290 before 1st July
• After 1st July, just buy what you need…

Domestic Tariff: If you use MORE than than 600kWh on average

• Before 1st July 2023 buy AS MUCH AS YOU feel comfortable doing*
  • Example is buying 2000 units in the month – converting to Rands thats:
    • 600 units at R2.9830 = R1790 PLUS
    • 1400 units at R3.6272 = R5078
    • Total R6868 spent in June 2023
• After 1st July 2023 – continue buying 600 Units EVERY month – until you run out
  • On the new tariff of R3.5080 per unit – that means buying R2105 each month in order to use up all the Cheaper rate tokens you get each month
• Why does this work? —  you’re buying MORE units at R3.62 to replace units that you’d otherwise have to be R4.26 for… that’s why you have to keep buying the cheap units AFTER July. If you don’t keep buying your 600 units each month, you’ll have paid R3.62 for units that you could have paid R3.50 for!

* Personally I’d be worried about having extra units for more than say 6 months… say I move house, or the meter breaks I risk losing those units… 

** if you get FREE BASIC units – then this probably isn’t a great idea! If you buy too much one month you might end up losing your allowance of free units, which will cost you MUCH more in the long run. For those who get free units, we’d always recommend only buying what you need every month – and make sure you ALWAYS collect your free units every month, even if you’re away – so just make sure you go to the shops and buy a basic level say R50-100… every single month. Every year about 1 in 10 people who are entitled to free units doesn’t collect them, don’t be one of those people! Whether you are entitled to free units depends on your municipality – generally you have to be qualified as ‘indigent’ but in some places old age pensions can qualify – and in some areas you must use under a certain amount every month or year… ask someone at your municipality if you think you aren’t getting what you deserve.