Article by Chantelle Gladwin-Wood, Partner and Maike Gohl, Partner
Introduction
At Schindlers we are inundated with queries from customers about various odds and ends relating to COJ (City of Johannesburg). Often we find that our customers fundamentally misunderstand the law pertaining to what the COJ is entitled to bill, and the extent of its obligation to provide services. This article accordingly takes a look at some of the ‘mysteries’ of dealing with the COJ.
Myth #1: Tariff rules are not the same for all services
It comes as a surprize to most people to learn that there are different rules applicable to how a property is classified for the different electricity, water, refuse, sewer and rates tariffs. The rules that apply to one of these, do not necessarily apply to the others. Every property must be individually assessed in each of these services (and for rates, which is not a service charge but a tax) in order to determine which tariff ought to apply to the property.
Myth #2: COJ can only terminate electricity or water supply, for arrears on the electricity or water account
In law the COJ is permitted to terminate the supply of any one service, for arrears on any account –
including rates. It is no defence to a termination of your water supply to argue that your water account is paid up, when your other accounts or services aren’t.
Myth #3: My query logged will protect me from disconnection
If you have logged a query relating to a disputed amount, you are obliged to keep paying the amounts that you think you owe (the “undisputed amount”) each month for that service, until your query is resolved. If you don’t, your query may no longer be valid.
Myth #4: I applied for a rezoning to correct a historical unlawful land use, now COJ must stop holding me liable for the violation
The rezoning process only culminates once the rezoning has been promulgated (published in the Government Gazette) and until then the municipality is entitled to continue to hold you liable for violations of the various laws. Having taken a step towards correcting the violation does not mean that you have corrected it – it means only that you are on the path to correcting it.
Myth #5: The “Mixed Use” Tariff is always cheaper
COJ has a mixed use tariff for water and sewer, but it does not have a mixed use tariff for electricity (see myth 1 above). The charges for mixed use water (which are essentially residential charges) might be cheaper for your building (depending on various factors) but the charges that accompany any discount or saving on the mixed use water might be eroded by the charges levied on the mixed use sewer tariff, which are essentially business charges. A proper examination of the building’s use and the split between the various components ought to be done to determine the best tariff for the building overall.
Myth #6: There is a “Mixed Use” electricity tariff
See myths 1 and 5. There is no such thing as a mixed use electricity tariff. If you have a building with different use components (say residential and business), unless you are on another kind of special tariff (like TOU or LPU), the building will be charged on the business tariff, even if the use components are “residential heavy” (meaning there is more residential than business). You might be able to achieve a saving by splitting the supplies, but a proper examination of the use case needs to be undertaken to understand what the best tariff is.
Myth #7: I am paying unnecessarily for demand charges on the LPU tariff, when my kWh consumption is low and its costing me huge amounts unfairly
Whilst it is true that you pay demand charges on the LPU tariff (which you don’t on the business tariff), this does not mean that you are paying more overall than you would have if you were on the business tariff. The tariffs are structured so that, on average, if your electricity use exceeds 70 KVA a month, you would be better off on the LPU tariff (where you pay demand charges) than on the business tariff (where you don’t pay demand charges) because the kWh rate charged on the LPU tariff is cheaper than the kWh charge on the business tariff, meaning that you pay less overall on the LPU tariff even though you are paying demand charges. Again, a proper use case analysis needs to be done before determining which tariff is best for a building.
