City of Joburg - Switching to prepaid

[Scorp007]

19 minutes ago, Bobster. said:

If I look at my bill, some of it is billed upfront. Rates are billed up front for EG. Everything that is a fixed charge is billed up front. But anything where usage varies and has to be metered is billed in arrears. Unless people are on pre-paid and buy a certain amount of credit and manage that, it can't be any other way.

Perhaps the CoJ exorbitant basic fee is already the average consumption of post paid households to make up for the service of power that can be cut off and not seen as a basic right like water. 

Why can other metros maintain and provide the service at below R200?

[Bobster.]

23 minutes ago, Scorp007 said:

Could the cash flow not be much improved if one had a meter that can/must be read but annually you pay for power up front based on the average you used the previous 6 months.

Those are called "estimated readings" in Johannesburg. I note from all by browsing through saved statements that we used to get that for water too, but not any more. Or not my meter - which is read every month.

23 minutes ago, Scorp007 said:

Employ people to read and disconnect power if the outstanding amount above the up front payment is exceeded and not paid within say 30 days. It is shocking to see how castle's have outstanding munic accounts for over R200th and they don't get cut off. Even for these massive houses this amount is perhaps more than a year's use. 

Well, I once didn't pay my municipal bill. It was completely my error, and the next month when I got a notice to say that I was in arrears I must have said "system error, and they will correct it", or, more likely, "idiots" and for two more months I paid just the current month's consumption, rates etc.

Then the empire struck back. Their first blow was to choke my water supply. The City cannot disconnect you completely, but they can make sure that you don't have a shower and it will take hours to fill a bath. At this point I dug out all my statements and receipts to take as evidence and noticed that, in fact, I hadn't paid the month in question.

I went up to the municipal offices, confessed my error, paid the outstanding amount and the penalties, and the next day they restored the water supply to normal. 

The reason I explain all that is that there is a process they have to go through to give you a chance to recover from a simple error (my case) or some sort of financial disaster. But there should be a limit to this.

I know that City Power are always out on a "disconnection drive" in some part of the City. And they don't play. They have cut off whole shopping malls. They have cut off Telkom sites. But there seems to be a recurring sequence of events.

1) City Power sends pre-disconnection notice (they are bound to do this by law)
2) Owner does nothing
3) City Power turn up to disconnect.
4) Owner says "we can work something out", signs an admission of debt, promises to pay off the arrears at so much per month as well as pay for the current usage every month.
5) Owner does no such thing.
6) Go back to (1)

So they do this dance a few times and then City Power decides to stop asking nicely.

Even when they disconnect there is a sequence that they must go through.

First they break the seal on the meter, turn it off and reseal. You can imagine the usual response to this.

Then a few months later they remove the meter. Again you can imagine the response.

Then another few months later they remove the cable between the substation and the property.

So they are cutting off, but they have to respect the laws as well. The law always takes time.

I do wonder though how the amounts get so high. Sometimes it is millions in debt that they are talking about. But I suppose if you can afford lawyers you can slow things down. 

And sometimes poverty is no excuse. When Herman Mashaba was mayor of Johannesburg he wrote an open letter to the Institute of Chartered Accountants of SA, telling them that they were not training people properly. To back this up he pointed out that there were a number of JSE listed companies with head offices in Sandton, who published audited statements each year, but the auditors had not noticed that the City of Johannesburg was not being paid. I don't know if this brought forth embarrassment and repentance and a settling of accounts, but it caused a stir at the time.

[Bobster.]

3 minutes ago, Scorp007 said:

Perhaps the CoJ exorbitant basic fee is already the average consumption of post paid households to make up for the service of power that can be cut off and not seen as a basic right like water. 

Why can other metros maintain and provide the service at below R200?

Indeed. And that fee gets hiked all the time. Of course the honest people who pay their accounts just take the pain and get on with it. 

I'm having an interesting time working through old accounts this morning to see how we got to our current state. Back in 2013 the fixed monthly fee was 367.52 before VAT. You'd think that's already pushing it a bit.

By 2016 it was 415.46. 

Now it's 825.38 for a 60A, single phase connection.

All figures are before VAT.

So it is a good question.

And it's not like our electricity unit cost is notably lower.


 

[Woody]

so this was in the recent coj budget, for prepaid charges;

High Users (regular customers)    +18.84%

High Users will also pay R244.2 Service Charge plus R237.3 Capacity Charge (both plus VAT)

Ie a R553.73 a month increase (with VAT) for pre-paid customers PLUS 18.84% increase in electricity use

the capacity charge makes no sense tbh, part of the talk of bail outs to municipalities is for them to push the use of prepaid meters, to clear out the chance of the crazy non payment debt building up again. putting a fixed charge on prepaid goes against that

[Bobster.]

3 hours ago, Woody said:

so this was in the recent coj budget, for prepaid charges;

High Users (regular customers)    +18.84%

High Users will also pay R244.2 Service Charge plus R237.3 Capacity Charge (both plus VAT)

Ie a R553.73 a month increase (with VAT) for pre-paid customers PLUS 18.84% increase in electricity use

the capacity charge makes no sense tbh, part of the talk of bail outs to municipalities is for them to push the use of prepaid meters, to clear out the chance of the crazy non payment debt building up again. putting a fixed charge on prepaid goes against that

I don't believe this is budget yet. I saw it released not on City stationary but that of an opposition party, by a provocative councilor. It's more likely a proposal, yet to be voted on and before the mandatory process of public consultation. 

Anyway, I am expecting a flat monthly fee. It's been on the books for years (the party that put this document out wants us to forget that they tried it first, then backed down). I suspect that the idea is to squeeze prepaid users now that there enough of them who cannot easily convert back to a conventional tariff, and it will work out more expensive but not quite as expensive as the alternative. So you sigh and live with it. 

Once they put the tariff charts showing the steps then we can each do our exercise and see how better off or not we'd be on another tariff. 

Eskom have also been talking about a fixed fee for prepaid, on the usual grounds: it costs just as much to provide the connection. 

What I don't like is TWO charges. The capacity charge is for providing a connection. The service charge is for meter reading and billing. They don't have to do that with prepaid customers, so there shouldn't be a service charge. The capacity charge I grumble but I see their point. The service fee makes no sense. 

What is overlooked is that prepaid users pay in advance. Duh! Of course! This is good for the City's cash flow (not the first time I've made that point) so I hope that during the consultation phase, lots of folks ask that question: why are you punishing people who are good for your cash flow?

In the meantime folks who contemplating the switch should hold their horses until the new, approved tariff tables are made available. 

[Bobster.]

On 2024/03/23 at 9:15 PM, Woody said:

so this was in the recent coj budget, for prepaid charges;

High Users (regular customers)    +18.84%

High Users will also pay R244.2 Service Charge plus R237.3 Capacity Charge (both plus VAT)

Ie a R553.73 a month increase (with VAT) for pre-paid customers PLUS 18.84% increase in electricity use
 

Figures expressed like this EG water +11.7% (that's a thumbsuck figure, I have no idea what the actual % is) are really unhelpful and I wish parties and the City would not circulate them.

The best I can think of is that they aim (in this case) to make 18.84% more from their base of pre-paid clients who do not qualify as indigent. But how? They are looking at some sort of average gain from their total base of clients, but how does that effect ME?

It's unlikely to be an 18.84% on everything. It may include the flat fees, it may not. It may be achieved by (as they have done before) playing with the tariff steps.

When I first converted to pre-paid, the first 500 units you bought in a calendar month were the cheapest. Then a few years back the steps on the tariff were reduced (so you hit the top tariff earlier) and also shifted so that the the first 350 units in the month were now cheap. If they did just those two things and didn't change the unit price, that would have bought more money in. The same applies now. Just doing those two things (and I don't know, but I will bet that the first step gets reduced again) would bring in part of that 18.84%. 

So please, opposition parties, if you have seen the new tariff tables, proposed or finalised, will you please share them? We are actually smart enough to read the tables, do some simple math, and calculate how much more pain we are going to be taking.

[Bobster.]

Proposed new tariffs, including tables that show the tariff steps are available at
https://joburg.org.za/documents_/Documents/2024-25 PROPOSED TARIFFS.zip

That's a zip archive that contains probably more than you want, but definitely includes details of all the electricity tariffs.

You are still usefully better off on pre-paid.

Edited March 26 by Bobster.
Clarity (I hope)

[Raiden2912]

4 hours ago, Bobster. said:

Proposed new tariffs, including tables that show the tariff steps are available at
https://joburg.org.za/documents_/Documents/2024-25 PROPOSED TARIFFS.zip

That's a zip archive that contains probably more than you want, but definitely includes details of all the electricity tariffs.

You are still usefully better off on pre-paid.

[JayMardern]

18 minutes ago, Raiden2912 said:

 

Like before though, the fixed fees are still much better on Prepaid - most notably the Capacity Charge (I believe this appears as 'Network Charge' on post-paid invoices). The gap is closing somewhat (Prepaid now gets a Service Charge under some circumstances), but as @Bobster. says, Prepaid will still often will be cheaper overall thanks to the large fixed fee difference. Blue highlight below:

 

As a post-paid user that submits my own readings (via the surprisingly decent www.e-joburg.org.za portal), it would be nice to get a bit of a reduction on this fee since we're saving employee labor by reading our own meters...

[JayMardern]

This is also somewhat disappointing, in the midst of an energy crisis I'd have hoped for a bit better for feed-in rates:

 

[Bobster.]

1 hour ago, JayMardern said:

As a post-paid user that submits my own readings (via the surprisingly decent www.e-joburg.org.za portal), it would be nice to get a bit of a reduction on this fee since we're saving employee labor by reading our own meters...

How does that work? You send them a photo that includes the serial number of the meter?

 

[Bobster.]

1 hour ago, JayMardern said:

This is also somewhat disappointing, in the midst of an energy crisis I'd have hoped for a bit better for feed-in rates:

 

NERSA rates, plus you have to be a net consumer. That means they won't pay you for more than you buy from them.

On a bad day I draw 4kWh from the grid, and on a bad month I'd draw 90. So on a bad month I could sell them 89. But you have to first go onto to the TOU tariff with it's even higher fixed fees, and then there's the special meter that is required. I wouldn't even break even.

I'd rather give my surplus production away, just as long as it doesn't cost me anything.

[Bobster.]

There's an interesting difference between "low" and "high" users on prepaid. I'd love this to be about your historic average use, but I think it's more about financial status.

The steps of the tariff are pushed back out for "high" users. So it's now the first 500 units in the month that are cheaper rather than 350.

The "low" users get 350 cheap units per month, but then it escalates more quickly. Over 500 units per month they are paying more. So they are saying that if you're indigent then you shouldn't be using a lot, or you need to control your consumption. 

I'd volunteer for that low tariff, but I suspect it's means tested.

[JayMardern]

29 minutes ago, Bobster. said:

I'd rather give my surplus production away, just as long as it doesn't cost me anything.

Agreed. Disappointingly un-enticing.

 

33 minutes ago, Bobster. said:

How does that work? You send them a photo that includes the serial number of the meter?

 

Yeah. They have your meter on file and you have to submit the current reading, along with a photo that has both the reading and the meter number visible - great to avoid estimates. But based on the proposed figures, prepaid is the true way: at least for now.
 

[Bobster.]

14 hours ago, JayMardern said:

Yeah. They have your meter on file and you have to submit the current reading, along with a photo that has both the reading and the meter number visible - great to avoid estimates.

One can do the same for water as well. Though I read my own meters and keep a log, and so I am very sure that my water meter is being read, and read accurately, every month. But it's a nice tool to have in case you get a wierd reading on your account one month.

[system32]

19 hours ago, JayMardern said:

 

Like before though, the fixed fees are still much better on Prepaid - most notably the Capacity Charge (I believe this appears as 'Network Charge' on post-paid invoices). The gap is closing somewhat (Prepaid now gets a Service Charge under some circumstances), but as @Bobster. says, Prepaid will still often will be cheaper overall thanks to the large fixed fee difference. Blue highlight below:

 

As a post-paid user that submits my own readings (via the surprisingly decent www.e-joburg.org.za portal), it would be nice to get a bit of a reduction on this fee since we're saving employee labor by reading our own meters...

I've read thru the ELECTRICITY SERVICES.pdf from the zip file.

• prepaid (low), to cater for the indigent customer
• prepaid (high) to cater for the rest of the residential prepaid customer

I doubt that anyone on this forum falls into the indigent category.
This issue is that c/kWh is regulated by NERSA and Network Charge/Service Charges are unregulated.
This allows CoJ to increase Network Charge/Service Charges higher than CPI and NERSA.

The CoJ plan is to "gradually align [prepaid] to the tariff applicable to the residential conventional tariff"

"The residential prepaid (high) customer to start contributing to the service and network operating and maintenance cost to gradually align to the tariff applicable to the residential conventional tariff"

I feel that this proposed change is unfair to prepaid customers.
1) The service charge is an administration charge for meter reading.
This is definitely not applicable to prepaid meters.

2) prepaid has no risk of default as CoJ is paid before delivering a kWh which helps with cashflow.
prepaid allows CoJ to receive finance interest in the money market or the payment.
This saving should be passed on to prepaid customers.

3) Prepaid has 3 bands and postpaid has 5 bands
4) Prepaid bands are 4% - 10.4% more expensive than postpaid.
5) The 2024/25 increase is excessive, for example A 350kWh per month prepaid increase is 1.76x more:

There is no justification for this massive increase.

[Bobster.]

21 hours ago, system32 said:

I've read thru the ELECTRICITY SERVICES.pdf from the zip file.

• prepaid (low), to cater for the indigent customer
• prepaid (high) to cater for the rest of the residential prepaid customer

I doubt that anyone on this forum falls into the indigent category.
This issue is that c/kWh is regulated by NERSA and Network Charge/Service Charges are unregulated.
This allows CoJ to increase Network Charge/Service Charges higher than CPI and NERSA.

The CoJ plan is to "gradually align [prepaid] to the tariff applicable to the residential conventional tariff"

"The residential prepaid (high) customer to start contributing to the service and network operating and maintenance cost to gradually align to the tariff applicable to the residential conventional tariff"

I feel that this proposed change is unfair to prepaid customers.
1) The service charge is an administration charge for meter reading.
This is definitely not applicable to prepaid meters.

2) prepaid has no risk of default as CoJ is paid before delivering a kWh which helps with cashflow.
prepaid allows CoJ to receive finance interest in the money market or the payment.
This saving should be passed on to prepaid customers.

3) Prepaid has 3 bands and postpaid has 5 bands
4) Prepaid bands are 4% - 10.4% more expensive than postpaid.
5) The 2024/25 increase is excessive, for example A 350kWh per month prepaid increase is 1.76x more:

There is no justification for this massive increase.

I agree with much of what you say here. I would make a noise about the capactity charge, even though I understand that it costs CP just as much to provide me a connection as it does my post-paying neighbour. 

But we pay more per unit, we pay up front, and, as you say, the City's risk is low, so what the heck is that other fee about?

I hope that pre-paid clients will put that question to the City during the mandatory phase of discussion with the public. For my zone that discussion will be in Claremont, where most residents will be exempt from the flat fees and couldn't give a hoot about them. But we need to get out there in our numbers, or join on line sessions, and ask those questions.

[Bobster.]

On 2024/03/23 at 12:26 PM, Scorp007 said:

Why can other metros maintain and provide the service at below R200?

Here's a breakdown by MBB, trying to answer the question "which city has the most expensive electricity?"

Note that some metros don't charge any fixed fees at all, and still come in at a lower overall cost than COJ.

Also note how much pre-paid users in COJ are saving at present. It is called lots.

https://mybroadband.co.za/news/energy/530247-most-expensive-cities-for-electricity-in-south-africa.html

[system32]

On 2024/03/28 at 10:32 AM, Bobster. said:

I agree with much of what you say here. I would make a noise about the capactity charge, even though I understand that it costs CP just as much to provide me a connection as it does my post-paying neighbour. 

But we pay more per unit, we pay up front, and, as you say, the City's risk is low, so what the heck is that other fee about?

I hope that pre-paid clients will put that question to the City during the mandatory phase of discussion with the public. For my zone that discussion will be in Claremont, where most residents will be exempt from the flat fees and couldn't give a hoot about them. But we need to get out there in our numbers, or join on line sessions, and ask those questions.

Do you have a link to the schedule of CoJ meetings?

[Bobster.]

9 hours ago, system32 said:

Do you have a link to the schedule of CoJ meetings?

No. There was a date circulated for my region, which is region B. April 10. So they are not far off now. 

[Bobster.]

10 hours ago, system32 said:

Do you have a link to the schedule of CoJ meetings?

Not a link, but here's the schedule

[Bobster.]

Eish! I should have known better. There was a bug in my spreadsheet formulae. I apologise, and I have edited this post to reflect the true situation. There is still a saving, but not as big as before.

 

I've worked through the current and the proposed tables. The situation past July is going to be VERY different.

On the current tariffs, at what I used to use a month (<500 units), I save about R872 a month. So the cost of the conversion is quickly recovered. Going forwards that saving will be just R97 R507. So the cost of changing over is not nearly as quickly recovered and you have to think about whether it's worth the bother.

If you're in the 900 units per month region you're going to save about R50 R454 a month.

If you're on solar and just topping up, let's say a 100 units every 2 months, then you'll pay R481.5 plus vat on the month in which you don't buy anything, and your saving against post-paid for 100 units is R134  R534 ish. 

So you may want to rethink this one. Or go to your feedback session and make a noise. If the proposed tariffs become reality then the happy days are over. 

Edited April 1 by Bobster.

[Jakac]

If there is anything that makes me very furious is Eskom raising the fees to cover for more FREE LOADERS. This pisses me off to such an extend that i can buy a backup solar system for another backup. If you know what i am saying.

[Bobster.]

36 minutes ago, Jakac said:

If there is anything that makes me very furious is Eskom raising the fees to cover for more FREE LOADERS. This pisses me off to such an extend that i can buy a backup solar system for another backup. If you know what i am saying.

I don't see any problem with differentiated tariffs for genuinely poor people. The current test, as far as I can determine, is that the house owner earns less than 7k per month, and that's for the lowest step of the ladder for the subsidised package. 

Combine that with City Power actively cutting off defaulters or bypassers, especially the big ones, and I can make a case for some cross subsidisation. If you income is less than 7k a month then you're really not in a good position. There are some employed people in this country earning not very much. If you earn minimum wage for 8 hours a day, 27 days a month then that's just under 6K a month. That's poor.

[system32]

On 2024/03/30 at 9:29 AM, Bobster. said:

Not a link, but here's the schedule

Thanks,

Found the link https://joburg.org.za/Pages/2024-25-IDP-Medium-Term-Budget-Draft-Rates-and-Tariffs.aspx

Some of the feedback meetings are on MS-TEAMS
There is also an e-form that you can use to comment - first link above,