Drive for prepaid power or smart meters

THE City of Johannesburg has proposed a raft of electricity tariff increases that could see residents paying, on average, 7.32% more across all the tariff plans from July.

The average increase has been reworked down from the 11.35% that the city’s electricity utility City Power proposed earlier.

The initial proposal was in line with the guidelines before the National Energy Regulator of SA (Nersa) last month approved an 8% average tariff increase for Eskom over the next five years, half of what it requested.

Last month the City of Cape Town and eThekwini metro tabled for public comment proposed increases for 2013-14 at 7.86% and 8%, respectively.

Nersa must approve all municipalities’ proposed increases.

City Power is also planning to roll out smart meters over three years until 2015, by which time residents are expected to be served either by prepaid or smart meters, which could improve the ability of the city to manage electricity consumption and usage patterns.

City Power said yesterday that smart meters — which are linked to computer systems — reported the exact amount of electricity used during a particular period, without requiring physical visits to properties by technicians. “In this they contribute to billing accuracy, as consumption is monitored in real time and estimated readings will no longer be required.”

City Power MD Sicelo Xulu said domestic residents using prepaid meters would see the lowest increase (1.4%) in the first of the three years of the tariff increases.

Mr Xulu said the cross-subsidy level for business to domestic and indigent users had been “significantly” reduced below the 1.25% average, and was expected to attract more private investment into the city.

However, those who seek to convert to prepaid meters to benefit from the one-year incentive — which will leap to 8% in 2014-15 and 201516 — may be expected to settle their outstanding bills in full or sign an acknowledgement of debt with the city. “There has to be a process for the outstanding amounts to be factored in,” Mr Xulu said.

In the City of Johannesburg 201112 audit report, the auditor-general flagged revenue-related issues as a concern, including billing estimates on electricity services.

Mr Xulu said yesterday inaccessible meters in people’s properties made billing estimates unavoidable. “A migration to prepaid meters could then assist in terms of effective revenue collection,” he said.

The city had also lost R1.3bn worth of electricity in its distribution network, perhaps due to ageing infrastructure and electricity theft.

Of the 442,155 customers in Johannesburg’s database, 154,327 domestic residents use conventional meters and 248,454 use prepaid.

Mr Xulu said the benefits of using prepaid meters included that the administrative function of taking meter readings and related service charges would be discarded and the utility would receive payment for services in advance.

Matshidiso Mfikoe, mayoral committee member for environment and infrastructure services, said the smart meters would enable the city to shift electricity loads away from peak periods and to restrict customers’ electricity use when supply was constrained.

Democratic Alliance caucus leader in Johannesburg Mmusi Maimane said City Power was poorly administered, which was partly the reason why it suffered electricity losses and low revenue collection.