Why are prepaid meters so costly

2019-03-06 06:03

WHY is converting to prepaid meters in uMngeni so expensive?

Many residents in uMngeni want to convert from conventional credit meters to prepaid meters but find the cost prohibitive. Quotes to convert from uMngeni Technical Services are usually more than R6 000 and similar to the cost of a new installation.

The tariff to convert on uMngeni’s budget has for years been a vague “at cost price plus 20%”. Questions in council meetings and e-mails to municipal management requesting a breakdown of the cost price by the DA have gone unanswered since 2015. In June last year, we eventually received a breakdown of costs: investigation fee R1 098, materials R1 242, testing and commissioning R1 460,80, consultants fee R533,11, municipal admin fee R790,16 and VAT R741,16, total cost R6 035,24, a once-off cost out of reach for most.

A new meter costs roughly R600 and installation should not exceed R1 000, according to installers in other municipalities. Converting to prepaid in eThekwini costs R2 010, which is affordable, and even in Msunduzi the cost is less than uMngeni at about R4 000. The disparity of conversion costs between municipalities seems fishy.

For four years I have made budget submissions to uMngeni suggesting that the actual cost and installation price be used with no additional charges and that uMngeni considers subsidising conversion as our billing department does not have the capacity to deal with the many queries it receives due to incorrect estimates on credit meter accounts. I’ve never received a response to any of my submissions. I hope that now that uMngeni has a dedicated electricity manager my submissions will be considered and uMngeni residents will eventually be able to afford converting to prepaid.


uMngeni Municipality

Response from Thando Mgaga, spokesperson for uMngeni Municipality.

It is prudent perhaps to highlight that it’s the administration that has pursued, even before 2015, the review of costs of migrating from conventional/credit to prepaid meters following Eskom’s decision to stop rendering the services of electricity infrastructure maintenance, which included meter migration, on behalf of uMngeni Municipality.

The municipality, after Eskom’s decision, had to employ service providers to take over from Eskom as we are yet to establish an in-house fully fledged electricity department. In recent months, our electricity manager has presented reports to the relevant committee of council on conversions to prepayment system which has the ultimate objective of assisting consumers to save on electricity costs by giving them the power to control their usage.

There were two options presented.

The first one is the replacement of faulty conventional meters whose lifespan has passed the regulated national standards.

The cost for this is borne by the municipality. The consumers are encouraged to migrate to the prepaid system if they so wish at no cost to them.

Voluntary migration costs are between R4 000 and R7 000, depending on the status of the metre needing replacement and the supply costs thereof. Moreover, the meters that municipalities use must comply with regulated electricity standards, therefore not every meter sold at outlets comply.

It is again necessitated by the author’s comparisons that one wishes to draw the differences between the examples made in the said letter.

EThekwini municipality is the only metro in KZN, with wide-ranging electricity customer categories which to some degree leads to cross-subsidisation. Msunduzi Municipality, as the capital city of the province, also has a large base of electricity consumers who cross-subsidise and both have fully fledged electricity departments.

The proposal which has served in our Technical Cluster Committee, which the author has based her letter on, is schedule to serve in the council, the final decision body, for a way forward.


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