Homeowners need clarity on council plans for pre-paid meters

The Eskom tariff hikes just approved by the National Energy Regulator (NERSA) make it even more urgent for the City of Tshwane and various other local authorities around the country to clarify their plans to ensure that every household has a pre-paid rather than post-paid electricity meter.

“With the minimum 8% increase in electricity costs every year for the next five years looming, consumers need to know with certainty who will pay for the installation of the meters and exactly what, if any, benefits they stand to derive if they have to convert from a post-paid meter to the pre-paid system,” says Jan Davel, MD of the RealNet estate agency group.

“This concerns our industry, too, because the costs of running a home these days, as well as the proper delivery of council services, are a major consideration for property buyers and sellers.”

At the moment, he notes, it seems as though the planned total switch to pre-paid that has already been announced by the Tshwane council and the Msunduzi council – and has also apparently begun to be implemented in Johannesburg – is actually only being considered in terms of the advantages to be gained by the local authorities.

“For example, when Tshwane Mayor KgosientsoRamokgopaannounced the plan during his State of the City address last year, he said quite clearly that it formed the basis of an initiative to ‘secure the financial position of the city’,in that it would give the council the power to ‘clamp down’ on residents who did not pay for other services (like water and rubbish removal) by blocking their ability to load electricity units on their pre-paid cards.”

Davel says it was also interesting to observe at the recent Nersa hearings that the Eskom hikes were not only being opposed by consumer organisations but also by local authorities, under the banner of the SA Local Government Association (SALGA), which said it feared that such tariff increases would induce such widespread consumer defaults on council bills that many local governments would soon be unable to collect enough revenue to sustain themselves.

Meanwhile, he says, consumers should be wary of claims that having a pre-paid meter installed will automatically mean a reduction in their electricity bills. “In fact, Eskom’s own website explains that while a sliding scale of charges applies to all electricity users, the price per unit is actually higher on the pre-paid system than on the post-paid system in every category of usage.

“So the only real way for the consumer on a pre-paid meter to save costs is to use less electricity, just as it is for the consumer on a post-paid meter. Usually, when those who switch to the pre-paid system do see a drop in their monthly electricity bill it is simply because they are no longer paying according to city council ‘estimates’ of their usage but only for the actual units they do use.”

Davel says questions have also been raised about the reliability and expected lifespan of pre-paid meters, about whether they are more prone to lightning strikes than post-paid meters, and about the possibility of corruption in the awarding of contracts for the supply of the many thousands of meters that will be needed to effect a total switchover. There are also many who feel that local authorities would do far better to spend money on sustainable or “green” power initiatives than on pre-paid meter installation.

“However, the other side of the coin is that pre-paid meters do undoubtedly give consumers more control over their own monthly budgets for electricity, instead of having to wrestle with erratic and often inaccurate council billing systems.

“Consequently, the existence of a pre-paid meter is rapidly becoming a significant plus-point for prospective homebuyers, and sellers should thus seriously consider having one installed, even if they have to pay for it themselves.”

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Jan 2018
      Extending from Randfontein in the west to Roodepoort in the east and including the towns of Krugersdorp and Magaliesburg, the West Rand has a plethora of property available to residents who choose to make this unique area their home.
    • 19 Jan 2018
      When it comes to financial planning, doing the work to ensure you’re prepared for unexpected emergencies is just as important as ticking off your other goals and New Year’s resolutions. The beginning of the year is also the perfect time to review your various insurance policies.
    • 19 Jan 2018
      No surprises at the first Monetary Policy Committee of 2018, as Reserve Bank Governor, Lesetja Kganyago, announced that the interest rates would stay at their current levels.
    • 18 Jan 2018
      The Southern Suburbs make up some of the most popular residential areas in Cape Town, comprising charming groups of suburbs which lie to the south-east of the slopes of Table Mountain. It is seen as the city's most expensive residential neighbourhoods with a choice of various private schools, upmarket eateries, wine estates, beautiful homes and trendy apartments.
    • 18 Jan 2018
      New year, new goals! If you’ve resolved to purchase your first property in 2018, then this 6-step guide from the Rawson Property Group is a must-read. It will help you navigate and simplify what is often be seen as a confusing process of buying your first home – right from the house-hunt to the house-warming.
    • 17 Jan 2018
      While the current property market may still favour buyers, it doesn’t mean that they shouldn’t be well prepared before putting in an offer to purchase.
    • 17 Jan 2018
      Lightstone lists Blair Atholl as the most expensive suburb with an average house price of R11.2 million, followed by Westcliff (R10.5 million), Dunkeld (R9.3 million), Sandhurst (R9.1 million) and Inanda (R7.2 million).
    • 17 Jan 2018
      As it currently stands, there are four main ways in which a home can be bought in South Africa, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, who adds that deciding in which legal entity to purchase the property is not a decision that should be entered into lightly, as each has its pros and cons.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us