Big electricity price shock for Johannesburg prepaid residents possible

Hanno Labuschagne

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Big electricity price shock for Johannesburg prepaid residents possible

Johannesburg residents could soon be paying R200 more for electricity each month, even before they start using it.

This is if a proposed capacity charge for prepaid electricity users in the city comes into effect at the start of July 2021.

According to the Democratic Alliance’s caucus leader in the City of Johannesburg Metro Leah Knott, the charge was approved as part of the the city's budget for 2021/2022 during a recent council meeting.
 

Sinbad

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Big electricity price shock for Johannesburg prepaid residents possible

Johannesburg residents could soon be paying R200 more for electricity each month, even before they start using it.

This is if a proposed capacity charge for prepaid electricity users in the city comes into effect at the start of July 2021.

According to the Democratic Alliance’s caucus leader in the City of Johannesburg Metro Leah Knott, the charge was approved as part of the the city's budget for 2021/2022 during a recent council meeting.
3rd attempt... Hope it fails again
 

Swa

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I thought this was another mybb repost, then read the article about the third time they're trying this.
 

Megapode

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Knott has a very short memory. This surcharge was first proposed in 2019 when Mashaba was mayor and the DA lead coalition was running the city. Did she object then?

The surcharge was dropped with the DA saying that it had been sneaked in to the budget after sign off by council.
 

Lupus

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3rd attempt... Hope it fails again
So do I, cause all this will do is move more people off the grid one way or another. You can't charge prepaid people before they've even charged up. Especially since a lot of the users R200 is their entire usage, now you're doubling up +adding 9% to their bill?
How does that even make sense? Like for myself that 200 bucks is already a 20% increase + the 9% on the first block and then the 18% on the 2nd block?
So how is that fair?
 

Sinbad

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So do I, cause all this will do is move more people off the grid one way or another. You can't charge prepaid people before they've even charged up. Especially since a lot of the users R200 is their entire usage, now you're doubling up +adding 9% to their bill?
How does that even make sense? Like for myself that 200 bucks is already a 20% increase + the 9% on the first block and then the 18% on the 2nd block?
So how is that fair?
They started pushing people to prepaid about 10 years ago. Maybe a bit more.
It's a much better prospect for the city than postpaid. There is no credit risk. No billing issues or queries.
They deliberately kept it cheaper than postpaid a) to encourage people to move and b) because it's cheaper for the city as well.

Now the greed kicks in, and they want more money, so they spin a story about how prepaid users don't contribute to the network maintenence etc so they must now pay this surcharge...

Forgetting to mention that the city markup on electricity, even prepaid, is what is supposed to maintain the network. And there is a big markup....
 

Johnatan56

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They started pushing people to prepaid about 10 years ago. Maybe a bit more.
It's a much better prospect for the city than postpaid. There is no credit risk. No billing issues or queries.
They deliberately kept it cheaper than postpaid a) to encourage people to move and b) because it's cheaper for the city as well.

Now the greed kicks in, and they want more money, so they spin a story about how prepaid users don't contribute to the network maintenance etc so they must now pay this surcharge...

Forgetting to mention that the city markup on electricity, even prepaid, is what is supposed to maintain the network. And there is a big markup....
Why do people keep mentioning this? Postpaid has an extra month's deposit, and a majority of the time people keep the same power usage or reduce, overall it doesn't really matter for the city while causing hassle for residents.
 

Sinbad

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Why do people keep mentioning this? Postpaid has an extra month's deposit, and a majority of the time people keep the same power usage or reduce, overall it doesn't really matter for the city while causing hassle for residents.
You're wrong bud.

My deposit was R844.

If I hadn't gone solar and prepaid my normal electricity bill would have been about 3-4k a month. Or more.
One month's deposit certainly will not cover the credit risk.
The deposit is also for the entire municipal account, not just electricity
Then there's collection costs and admin associated with that... Ask any well run business whether they'd prefer cash up front or consumers billed in arrears...
 
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Johnatan56

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You're wrong bud.

My deposit was R844.

If I hadn't gone solar and prepaid my normal electricity bill would have been about 3-4k a month. Or more.
One month's deposit certainly will not cover the credit risk.
Then there's collection costs and admin associated with that...
There's a debit order on your account for post paid AFAIK (at least ours was).

Prepaid should have one month deposit, post paid should be two, I used to have the links but MyBB off topic isn't properly searchable anymore.

Collection cost/admin is mostly automated, shouldn't be very high, and if not paid you just cut off, fixed cost of the people you hired to do that.
 

Lupus

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They started pushing people to prepaid about 10 years ago. Maybe a bit more.
It's a much better prospect for the city than postpaid. There is no credit risk. No billing issues or queries.
They deliberately kept it cheaper than postpaid a) to encourage people to move and b) because it's cheaper for the city as well.

Now the greed kicks in, and they want more money, so they spin a story about how prepaid users don't contribute to the network maintenence etc so they must now pay this surcharge...

Forgetting to mention that the city markup on electricity, even prepaid, is what is supposed to maintain the network. And there is a big markup....
Exactly, you already charge a markup on the units bought. Then suddenly prepaid doesn't cover costs?? Well what are the markups for?
 

Sinbad

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There's a debit order on your account for post paid AFAIK (at least ours was).

Prepaid should have one month deposit, post paid should be two, I used to have the links but MyBB off topic isn't properly searchable anymore.

Collection cost/admin is mostly automated, shouldn't be very high, and if not paid you just cut off, fixed cost of the people you hired to do that.
No, the people hired to cut off are subcontractors. Anyway you are still wrong. :D

And no, you don't need a debit order. And debit orders can bounce anyway.
 

Johnatan56

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No, the people hired to cut off are subcontractors. Anyway you are still wrong. :D

And no, you don't need a debit order. And debit orders can bounce anyway.
Do you think those sub contractors are not permanently hired anyways?

And debit order can bounce, and power gets switched off, it's really not that much of a hassle and most of the rest of the world works like that without issue.
 

Lupus

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There's a debit order on your account for post paid AFAIK (at least ours was).

Prepaid should have one month deposit, post paid should be two, I used to have the links but MyBB off topic isn't properly searchable anymore.

Collection cost/admin is mostly automated, shouldn't be very high, and if not paid you just cut off, fixed cost of the people you hired to do that.
Prepaid has no deposit, because if you don't buy units you don't have electricity.
If you don't buy units over the month, you don't get electricity, it's not like post paid where the power is on all the time and they hope you pay.
That's why there is no risk to the city for prepaid as they aren't providing something without a guarantee of payment. Though if course this is taking into account people who don't bypass the meters, but that happens on postpaid as well.
 

Lupus

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Do you think those sub contractors are not permanently hired anyways?

And debit order can bounce, and power gets switched off, it's really not that much of a hassle and most of the rest of the world works like that without issue.
And with prepaid if you don't recharge your power goes off. No need for a sub contractor to come cut you off.
 

Johnatan56

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And with prepaid if you don't recharge your power goes off. No need for a sub contractor to come cut you off.
Well, moving to "smart" meter system everywhere, no need for a contractor to come cut you off, can be automated as well.
 

Lupus

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Well, moving to "smart" meter system everywhere, no need for a contractor to come cut you off, can be automated as well.
They seemed to stop that around 2018.
And most prepaid meter is basically a smart meter.
 

system32

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Capacity charge? More like to offset the losses due to illegal connections and theft.
+1
The rates for pre-paid are much higher and smaller bands.
This capacity charge is already included in the higher rates.

Just another method to fund corruption, incompetence, maladministration.

First come to us with a clean audit, then we can talk about rates, fees & taxes
 
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