Prepaid Electricity

[recre8]

After reading another thread today, and once again flaring up my frustration with PEC Metering. I have a few questions regarding the CPA.

Just a bit of background. My entire area (an estate with lots of small complexes in it) has its electricity supplied by PEC metering, which has a pre-paid meter installed in every unit. Eskom places one single meter outside each complex, and then PEC Metering pays this bill by collecting money from the sales of pre-paid electricity. PEC Metering is charged a Inclining Block Tarrif by ESKOM for the entire complex where for example, the first 100 units are 50c the next 200 units are R1 and all units after that is R1.50 (just an example). PEC then recoups the cost by charging each a flat rate of R1.50 per unit regardless of your usage. You can see how they make a profit here. This flat rate is also much higher than ESKOM's highest tariff. I suggest you also read the Hello Peter link further down to read about unethical/illegal disconnections, R400 charges to see your own post-paid meter, and questionable readings etc.

My questions refer to a CPA booklet I downloaded here: http://www.webberwentzel.com/wwb/action/media/downloadFile?media_fileid=6474

1.

10.1 The right to select its suppliers:
• the Act imposes various restrictions on the bundling of products. A supplier
is prohibited from requiring a consumer, as a prerequisite to concluding a
contract, to purchase any other particular goods or services from that
supplier, or a designated third party, unless the convenience or economic
6 7 benefit to the consumer outweighs the limitation on the consumer’s right to
choose or the bundled goods or services are also offered separately and
at individual prices;

The bundling with that specific pre-paid meter forces me to buy electricity from PEC Metering. Does that contravene the above clause in the CPA.

2.

14.1 The Act provides that a supplier may not:
• offer to supply, supply or enter into an agreement to supply goods or
services, on terms that are unfair, unreasonable or unjust, or at a price
which is unfair, unreasonable or unjust

The price is unjust compared to ESKOM and the local municipality. For the same amount of units I use in a average month, I would pay about half.

3. Is there a law stating that profit may not be made from electricity reselling?

I have tried complaining to PEC Metering. They responded it is not a viable business model to charge less. I have now tried for 6 months to get a response from NERSA, but they simply responded that they are aware of the situation and has been for a very long time, but there is no solution yet. I have tried contacting my political party for possible assistance, but it doesn't seem like I will be getting a reponse there either. If anyone has any advice about how to solve this, please let me know. Perhaps even if you know anyone in the press who can help out.

I know that R250 a month extra for electricity isn't all that much, but just the principle of being forced to buy electricity from a company with a shameful track record, incredibly slow responses and excessively rude responses, all while paying twice what everyone else does is making my blood boil.

 

[rudolfe]

you not allowed to ask more than what the munic bylaw state, go and find your local munic bylaws.

 

[Fudzy]

Have you made PEC aware of this thread? You might get a better response if the company tries to save face. If I understand your situation correctly your houses feed off a bulk-meter, which could mean you are sub-metered. (Like a house that has a separate meter for a granny flat, the house owner still ultimately responsible for the utility bill)

Do you pay any additional charges AND the unit cost? If not the extra cost per unit could be going towards paying off the infrastructure/management fees.

 

[recre8]

Hi Fudzy.

Yes, we are submetered. PEC has all the complexes in the estate on Eskom bulkmeters. They then receive the post-pay account statement from Eskom every month. All residents have PEC pre-paid meters. I asked PEC Metering for an ESKOM statement they received, and they forwarded it to me. The statement shows PEC Metering's address as the recipient of the statement, so they "own" the bulk meter.

All pre-paid electricity sold by PEC Metering is charged at a flat rate of R1.20 (and a few millicents) per unit. This is slightly more than the highest block in the Eskom Homelite 1 Inclining Block Tarrif (IBT). This means that PEC is scoring, because they are charged the IBT for the bulk meter outside, but residents pay full price for every unit.

I understand that the extra cost could go towards infrastruce, but the communal electricity usage is shared among all residents in the complex, and quite frankly, PECs metering is shockingly bad compared to Eskom. Just as an example: They charge almost R400 to reconnect people who they disconnect and then state that reconnection will take upto 48 hours from the moment they have the money in their account, i.e. about 4 days when taking into account interbank EFTs.

NERSA is just as much to blame since they regulate PEC Metering and approved their flat rate charge. They have had two years to implement a IBT tarrif they forced onto ESKOM and municipalities, but they are still dragging their feet.

 

[recre8]

Oh and I forgot to mention, the Eskom bill for that month was about R1600 and when the total number of units are multiplied by PEC's flat rate unit tariff they it comes to about R2500. They profited about R900 that month.

 

[TheStorm]

Same thing happening at the flat complex I live in. Im being billed R1.07 per unit thats the highest tarrif in the city of cape town. I also feel that PEC is a rip off. I Could save a R100+ if I was billed the same way as ESKOM/City Of Cape Town

 

[recre8]

I sent e-mail to an official in the City of Cape town now and await a response. I think its time for PEC Metering to pay up.

 

[Fudzy]

Good luck!

Btw, I assume your complex has a board of trustees? It's almost AGM time, why not have it added to the minutes to investigate alternatives?

 

[Fudzy]

Also, how does one get disconnected from a prepaid meter? I thought the whole point of them is the fact that when the units ran out, the onus was on you to just buy another token?

 

[recre8]

Luckily having a pre-paid meter I can't be disconnected unless they suspect meter tampering/bypass, but the poor unlucky people living in building with post-paid meters are getting screwed over and they are easily disconnected. Many people complain about not receiving statements, or SMSs and then simply being disconnected. Since submetering companies are not regulated with regards to disconnection from the grid, PEC has some very very harsh penalties. R250 disconnection fee, and another R400 reconnection fee. Shocking hey. Worst is, they take 48 hours to reconnect you. I guess some people get to defrost their fridge regularly.

 

[recre8]

The receipt of the e-mail has been acknowledged by the City of Cape Town director and is being deferred to the Executive Director Utilities now.

 

[Sherbang]

I think you need to get this in the papers, then you'll get a response. Maybe Wendy Knowler?
Sounds illegal to me. Also, make an issue of it on twitter, you can tag @helenzille directly...

 

[recre8]

I think you need to get this in the papers, then you'll get a response. Maybe Wendy Knowler?
Sounds illegal to me. Also, make an issue of it on twitter, you can tag @helenzille directly...

I have tagged her directly twice in tweets about the matter, but have not gotten a reponse. I'm not sure of how twitter works - does she need to follow me to see tweets she is mentioned in? In anycase I also forwaded e-mail copies to [email protected] and [email protected]

EDIT: Also forwarded a copy to Wendy Knowler

 

[The Thug]

It is actually totally illegal for PEC Metering to charge you at the rate they appear to be charging. The only exception is if they are licenced by NERSA as a electricity provider and I can almost guarantee you, they are not.

They have to charge you at the rate Eskom / City Council charge but they are allowed to charge a service fee.

Take your complaint straight to the National Electricity Regulator.

 

[recre8]

I have complained numerous times to NERSA. I only once received a response and this was it:

Good day

With reference to the enquiry about the implementation of IBT by Eskom.

I wish to bring to your attention that the IBT system is a fairly new system that was first implemented by Eskom and other few municipality but most municipalities have not implemented the system
The IBT system is still in its infancy stages therefore resellers of electricity like PEC have not yet adopted the system as NERSA is still looking into how the system can best accommodate resellers such that they both the customer and the service provider benefit from the system.

However, resellers of electricity like PEC Metering have to follow into the footsteps of either Eskom or the municipality that they fall under when billing their customers.

Regards,

Palesa Radebe
Electricity Licensing, Compliance and Dispute Resolution
National Energy Regulator of SA
526 Vermeulen Street
Arcadia, Pretoria
012 401 4600-Switchboard
012 401 4062-Direct
012 401 4700-fax

I'm not sure what I should read into the highlighted section, but still, under the bylaws of the City at the very least, they are not operating within the letter of the law. Its just strange that nobody is doing anything about it.

 

[somescrub]

I'm not so sure CPA applies.
When did you enter into this contract? CPA has a effective date and if you entered into this contract before April 2011 CPA does not apply.
However there are a number of other laws and by-laws you may have more success with.

 

[recre8]

Hmm I'm not sure I ever entered into a contract, the prepaid meter was there when I bought the house. But yes, if the CPA does not apply, the municipal bylaw is still in effect.

 

[TheStorm]

I think you need to get this in the papers, then you'll get a response. Maybe Wendy Knowler?
Sounds illegal to me. Also, make an issue of it on twitter, you can tag @helenzille directly...

+1 on this being a story in a paper or maybe evens on tv Carte Blanche or 3rd degree . Then maybe more people can get involved against this practice by PEC

 

[recre8]

+1 on this being a story in a paper or maybe evens on tv Carte Blanche or 3rd degree . Then maybe more people can get involved against this practice by PEC

Here is a calculation made on an average month with 360 units used as provided by the various suppliers using the current tariffs:

City of Cape Town
Tariff Source: http://www.capetown.gov.za/en/electricity/tariffs/Pages/default.aspx
Tariff: Lifeline (Less than 450 units consumer per month)
50 units Free Basic Electricity @ R0 = R0
100 units Block 1 @ R0.616 = R61.60
200 units Block 2 @ R0.8104 = R162.08
10 units Block 3 @ R1.0743 = R10.75
360 units total = R234.43 + 14% VAT = R267.25

Eskom
Tariff Source: http://www.eskom.co.za/live/click.php?u=%2Fcontent%2F201112RatesNon-localAuthority.xls&o=Item%2B623&v=afaf21
Tariff: Homelight 1
50 units Block 1 @ R0.5765 = R28.83
300 units Block 2 @ R0.6616 = R198.48
10 units Block 3 @ R0.9605 = R9.61
360 units total = R236.92 + 14% VAT = R270.09

PEC Metering
Tariff Source: My electricity till slip since they don't publish their tariffs
Tariff: Everyone-at-PEC-needs-a-BMW
360 units @ R1.20 VAT inclusive = R432.00

R160 extra per household times with thousands of households and you can see someone is making a serious amount of cash.

 

[recre8]

Good luck!

Btw, I assume your complex has a board of trustees? It's almost AGM time, why not have it added to the minutes to investigate alternatives?

You're forgetting that the Western Cape is governed by the DA. I have already received a response (thats about an 5 hour turnaround time) from the relevant official.

The response clearly is sympathetic to those suffering under PEC Metering. I'm paraphrasing here but the response basically says that NERSA is ultimately responsible for regulating the electricity resellers and is looking for a solution (IMO: as they have been doing for quite some time without any success). As for the clause in the bylaw: "City of Cape Town Supply By-law and City of Cape Town electricity tariffs do not apply in the Eskom supplied areas within the City of Cape Town municipal boundary"

Since my area is supplied by Eskom because the municipality does not have any infrastructure there, all of us are left to the mercy of whatever PEC Metering deems fair. Basically I'm SOL.

Intestingly a contradictory statement is made in the "NERSA Concept Paper on Electricity Resale in South Africa" document:

• Each municipality is a service authority for the electricity reticulation function for the whole of its jurisdictional area. This means that the municipality bears the responsibility to ensure that electricity reticulation services are provided to all consumers within its area/s of jurisdiction

The response from NERSA states something similar:

However, resellers of electricity like PEC Metering have to follow into the footsteps of either Eskom or the municipality that they fall under when billing their customers.