Joburg's prepaid electricity hikes have never been subject to a public process

mylesillidge

mylesillidge

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Big Johannesburg prepaid electricity lie

Energy analyst Chris Yelland said the City of Johannesburg’s prepaid electricity price increases are outrageous and have never been subject to a public process.

In July, the City of Johannesburg increased prepaid electricity prices for poor households by six to twelve times the inflation rate.
 
Electricity markups are meant to cater for sallaries,Infrastructure and maintenance
The difference between prepaid and postpaid in service fees is meant to cater for the infrastructure needed for postpaid ( accounts etc ) . Prepaid is cheaper for teh city to run
So saying postpaid is subsidising prepaid is a lie.
 
Major Boredom said:
Electricity markups are meant to cater for sallaries,Infrastructure and maintenance
The difference between prepaid and postpaid in service fees is meant to cater for the infrastructure needed for postpaid ( accounts etc ) . Prepaid is cheaper for teh city to run
So saying postpaid is subsidising prepaid is a lie.
Click to expand...
Yip, they never seem to comment on prepaid unit rates being higher than postpaid, but i guess politicians always twist the truth to match their agenda.
And then they also never seem to take into account that with prepaid they receive the money upfront and have less chance of users abusing the system and going into debt.
 
Major Boredom said:
Electricity markups are meant to cater for sallaries,Infrastructure and maintenance
The difference between prepaid and postpaid in service fees is meant to cater for the infrastructure needed for postpaid ( accounts etc ) . Prepaid is cheaper for teh city to run
So saying postpaid is subsidising prepaid is a lie.
Click to expand...
I'd bet the cost is rather similar from an administration perspective (they'll pay commission on prepaid purchases etc) with the exception of the lack of need for credit control / debt collection etc however the infrastructure in terms of cables, subs, service & maintenance of it etc is probably what they're addressing.

This is supposed to be included in an increased cost per KWH than post-paid who pay this separately. I'm not with City Power so not sure what the price differences are between post and prepaid per kwh.
 
Fcon_Vpro said:
Yip, they never seem to comment on prepaid unit rates being higher than postpaid, but i guess politicians always twist the truth to match their agenda.
And then they also never seem to take into account that with prepaid they receive the money upfront and have less chance of users abusing the system and going into debt.
Click to expand...
Someone is making commission on prepaid purchases and the equipment etc to manage it so I'd imagine there's still a comparable cost with pros/cons of each. I agree on the prepaid kwh cost supposedly to cover this and the physical infrastructure but not sure by how much it differs.
 
Well, to celebrate this great success and the -3 degrees expected in JHB overnight here's an image of a black hole feeding off a star.

1720425105431.png

“It is intended to provide revenue to fund the city’s investment in new electricity infrastructure and maintenance of existing infrastructure.”

Can't wait for all that wonderful maintenance and new infrastructure... they will spend your money very deliciously.
This time, guys, this time.
 
quovadis said:
Someone is making commission on prepaid purchases and the equipment etc to manage it so I'd imagine there's still a comparable cost with pros/cons of each. I agree on the prepaid kwh cost supposedly to cover this and the physical infrastructure but not sure by how much it differs.
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I hear you and im aware that there are those different costs, but postpaid also has a meter that still needs to be read, managed/maintained and billed for. So to me each has option still has its associated admin costs involved.

I don't have the recent rates for postpaid, but here is from a few years back:
The first block cost for prepaid is cheap in comparison to postpaid, but once you exceed 350/500kwh, then you are paying a rate that postpaid only pays from 2000/3000kwh onwards.
So for very heavy users, postpaid is way cheaper.
With the new service fees for prepaid, its a significant increase for light users, probably about 25% increase.

Screenshot from 2024-07-08 09-57-16.png
Screenshot from 2024-07-08 09-57-06.png
 
Fcon_Vpro said:
I hear you and im aware that there are those different costs, but postpaid also has a meter that still needs to be read, managed/maintained and billed for. So to me each has option still has its associated admin costs involved.

I don't have the recent rates for postpaid, but here is from a few years back:
The first block cost for prepaid is cheap in comparison to postpaid, but once you exceed 350/500kwh, then you are paying a rate that postpaid only pays from 2000/3000kwh onwards.
So for very heavy users, postpaid is way cheaper.
With the new service fees for prepaid, its a significant increase for light users, probably about 25% increase.

View attachment 1736933
View attachment 1736935
Click to expand...

Even when you take the fixed fee's that post paid users pay each month?
 
Fcon_Vpro said:
I hear you and im aware that there are those different costs, but postpaid also has a meter that still needs to be read, managed/maintained and billed for. So to me each has option still has its associated admin costs involved.

I don't have the recent rates for postpaid, but here is from a few years back:
The first block cost for prepaid is cheap in comparison to postpaid, but once you exceed 350/500kwh, then you are paying a rate that postpaid only pays from 2000/3000kwh onwards.
So for very heavy users, postpaid is way cheaper.
With the new service fees for prepaid, its a significant increase for light users, probably about 25% increase.

View attachment 1736933View attachment 1736935
Click to expand...
Thanks for the rates. Considering the rates/calculations provided it does seem that there is a large disparity between pre and post paid for the same service and consumption. From a practicality perspective the question still remains if one is subsidising the other. I'd guess the only way to determine that would be to know the breakdowns but you'd assume that if all customers were on prepaid or all customers were on postpaid there would be parity between the two. If not something has to give.
 
Neuk_ said:
Even when you take the fixed fee's that post paid users pay each month?
Click to expand...
I'd love to know the motivation for service and capacity charge. Heck, Eskom direct only charges a capacity charge.

Edit: I do see that the rates are cheaper than Eskom Direct.
 
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quovadis said:
I'd bet the cost is rather similar from an administration perspective (they'll pay commission on prepaid purchases etc) with the exception of the lack of need for credit control / debt collection etc however the infrastructure in terms of cables, subs, service & maintenance of it etc is probably what they're addressing.

This is supposed to be included in an increased cost per KWH than post-paid who pay this separately. I'm not with City Power so not sure what the price differences are between post and prepaid per kwh.
Click to expand...
Part of the R230 increase is R80.50 for service fee (tax).
The service fee was originally for reading your postpaid meter - remember the street walkers that came to your house and read the meter?
This service fee is not applicable to pre-paid.

CoJ has had prepaid since at least 2005.
The R/kWh (unit) price was higher than post paid to make up for the network fee.
CoJ reduced the bands on prepaid to make it even more expensive than postpaid.
CoJ don't need to run a debtors book for prepaid.
CoJ get paid 30-60 days upfront for prepaid and have no bad debts.
CoJ don't need to cutoff non-payers - the meter does that.

From the comments of CityPower, the R230 tax is just a start and they want to hike this dramtically in comming years.

Nersa control the R/kWh, they don't control the network & service taxes.

Its executive mayor, Kabelo Gwamanda, said the higher rates created fairness and transparency in the city’s electricity tariffs regime
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If they wanted fairness and transparency, CoJ would have:
Consulted residents more widely
Let residents know how many customers are on it's prepaid indigent register
Let residents know how many total prepaid customers they have
You can then use these number to draw your own conclusions.

Instead CoJ hides the increase, stating that the increase is ~12.5% (nersa approved) and not include the R230.
CoJ does not include VAT on it's rates - although we all pay VAT.

CoJ state that the fixed fee is required for providing a service - but the fixed fee has no relation to the load I put on the network.

The real reason is that CoJ are not collecting money and they corrupt and wasteful.
Center of JHB has collapsed with reduced property valuations and reduced rates and electricity consumption.
Townships don't pay and the middle class is having to carry CoJ's failures.
See https://mybroadband.co.za/forum/thr...ts-paying-for-electricity-city-power.1101776/
 
system32 said:
Part of the R230 increase is R80.50 for service fee (tax).
The service fee was originally for reading your postpaid meter - remember the street walkers that came to your house and read the meter?
This service fee is not applicable to pre-paid.

CoJ has had prepaid since at least 2005.
The R/kWh (unit) price was higher than post paid to make up for the network fee.
CoJ reduced the bands on prepaid to make it even more expensive than postpaid.
CoJ don't need to run a debtors book for prepaid.
CoJ get paid 30-60 days upfront for prepaid and have no bad debts.
CoJ don't need to cutoff non-payers - the meter does that.

From the comments of CityPower, the R230 tax is just a start and they want to hike this dramtically in comming years.

Nersa control the R/kWh, they don't control the network & service taxes.


If they wanted fairness and transparency, CoJ would have:
Consulted residents more widely
Let residents know how many customers are on it's prepaid indigent register
Let residents know how many total prepaid customers they have
You can then use these number to draw your own conclusions.

Instead CoJ hides the increase, stating that the increase is ~12.5% (nersa approved) and not include the R230.
CoJ does not include VAT on it's rates - although we all pay VAT.

CoJ state that the fixed fee is required for providing a service - but the fixed fee has no relation to the load I put on the network.

The real reason is that CoJ are not collecting money and they corrupt and wasteful.
Center of JHB has collapsed with reduced property valuations and reduced rates and electricity consumption.
Townships don't pay and the middle class is having to carry CoJ's failures.
See https://mybroadband.co.za/forum/thr...ts-paying-for-electricity-city-power.1101776/
Click to expand...
I was simply looking at it from a practical perspective rather than getting into the weeds. CoJ has been a disaster in terms of costs, management etc.
 
Sooo if I am paying my R1000+ pm on postpaid for network charge to subsidize prepaid, and now prepaid started paying, why am I not paying less from this month for using 20 units pm? We are on smart meters so there are no salaries paid for people reading meters.
 
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