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IOLProperty - South African Property For Sale
Tuesday Jul 17, 2012

Outrage, shock over Joburg's soaring prepaid costs

Some prepaid electricity customers in Joburg are reeling after being slapped with up to 55 percent increases in tariffs since July 1.

Customers are infuriated that they have been getting fewer units for their money, and say their increase is far more than Joburg's approved annual increase of 11.57 percent.

City Power admits that the increases could be higher because of the way the utility runs its inclining block tariff (IBT) system.

But customers were not told of this and have been left wondering why they are getting fewer units.

IBTs have different rates for usage in different blocks, starting from the cheapest rate.

Most municipalities split the charges incrementally over a series of blocks.

But City Power usage at the rate of highest usage block.

Thus a City Power customer using 800kWh in a single month would be charged R857.20 (800kWh x 107.15c/kWh for block 3).

If City Power used the IBT system as others do, the bill for 800kWh would be R721.19 (300kWh x 78.28c/kWh for block 1, plus 200kWh x 82.45c/kWh for block 2, plus 300kWh x 107.15c/kWh for block 3).

That means City Power's bill is 19 percent higher before the annual increase is included.

Electricity charges must be approved by the National Energy Regulator of SA (Nersa), which confirms that it approved the way in which Joburg uses the system.

Customer Clement Simons's increase was 55.2 percent.

"Everyone is told that prepaid is cheaper. Why are we paying so much? We should have stayed on conventional," he said.

Abdul Mia said his electricity cost had increased by 30 percent, jumping from about R1 000 a month to about R1 300.

"They have not informed customers of these new increases. I live in a small house and this is a huge increase.

"This is cheating customers," he fumed.

He bought units on July 1 and got fewer units, apparently because the computer was not reset.

"I went to City Power and demanded my refund. The staff could not understand the problem and refused to give it to me.

"It was only (refunded) when I asked to see a supervisor who understood the problem and refunded me the excess I had paid."

In Simon Schonveldt's case, the cost has gone up 44.31 percent since July 1.

On June 1, he purchased 590 units with R500 at a cost of 74.2c/kWh, and on July 1 he spent about the same again but got only 401 units, but this time was charged R1.07/kWh.

"The municipality is encouraging people to change over to prepaid meters and yet they have this huge increase. Surely this cannot be correct?" he asked.

Explaining the variants, Nersa spokesman Charles Hlebela said "the Nersa IBT guideline allows variations in the implementation of IBTs".

"Therefore, City Power's IBT is implemented differently from Nersa-approved IBTs," Hlebela explained.

City Power acting managing director Sicelo Xulu said all new customers were registered on the lowest block.

Twice a year, customers' average monthly usage is calculated and this determines the tariff block to which they are allocated.

"A customer who manages to consume on average less electricity will be put on a cheaper tariff and will enjoy the privilege of buying electricity at a cheaper tariff.

"Every year, in July and January, customers are moved to the new categories as per their consumption pattern and it is only in July that customers also experience an increase as part of City Power's annual tariff increase," Xulu said.

"The more a customer buys within the same month and exceeds the block limit, the more they will pay and get fewer units."

Xulu said customers who averaged more than 500kWh were also charged a 2c/kWh demand management levy.

City Power admitted that there has been a "gap" in communication with its customers.

Tshidiso Nkgoedi, City Power's general manager of customer services, admitted that six-monthly tariff changes had not been communicated to customers.

However, a tariff booklet would soon be issued and explanations of the tariffs placed prominently at vending points.

"The positive aspect... is that a customer who manages to use fewer units will be put on a cheaper tariff and will enjoy the privilege of buying electricity at a cheaper tariff."

Last year, the city installed prepaid meters free of charge to customers whose properties were inaccessible to meter readers.

About 19 000 meters were installed, but the free project has now ended.

The Star

 
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