Local gov busts myths about pre-paid electricity

2019-04-25T06:45:25+00:00April 24th, 2019|News|

Having a prepaid meter enables residents to have more direct control over their usage, and budgeting is made easier as the meters include a display that shows consumption clearly.

Cape Town Mayor Dan Plato and Councillor Phindile Maxiti visited residents at their homes to check on their new electricity meters.

‘’Our recent site visits were very informative. As a local government, it is vital and responsible to invest in City infrastructure to ensure that operations are run efficiently and sustainably, but also importantly, this programme provides our customers with solid benefits. The chance of electricity supply being cut off due to non-payment is also eliminated when a prepaid meter is installed. The risk of meter failure is furthermore reduced,’’ says Mayor Plato.

‘‘Residents may be hesitant to make the switch as there are a number of urban myths regarding having a prepaid electricity meter. Importantly, despite the urban myths that exist, electricity is not more expensive via a prepaid meter. In fact, the installation of a prepaid meter is a prerequisite for access to the City’s subsidised Lifeline Tariff and could allow residents access to this financial assistance and free units should they meet the other qualifying criteria. Having a meter really holds great benefit and we encourage our customers to make the switch like the Williams and Marston households have done,’’ says Councillor Maxiti.

The schedule – when the programme will reach each area – is available on the City’s website.

Once in an area, a contractor appointed by the City will do a mail-drop at each targeted customer’s address requesting that they make contact to set up an appointment at a convenient time. Once the appointment has been made, a reference number will be generated. If residents have not received a mail-drop or are in any doubt as to whether this is a legitimate City project, they can contact the City’s call centre.

The new prepaid meter is located outside on the street, with an in-house display provided inside the customer’s property. Locating the meter outside the premises allows the City to easily access the meter and also to check whether there has been any tampering.

Common myths about buying electricity

Myth Truth
1 The amount you pay per unit is different depending on which suburb of Cape Town you are in. Your electricity usage combined with your municipal property valuation and / or meter type determines what you pay.
The City has three residential tariffs, Lifeline, Domestic and Home User (HU) and, depending on usage, such as purchase of less than 450 units per month qualify for the Lifeline tariff dependent on property value; otherwise the Domestic or HU tariffs apply dependent on property value. You will have one of these tariffs applied to your meter not because of the suburb that you live in but based upon the above criteria, of which property value is one of the considerations. Should you have an old-style credit meter, you will be placed on the Home User tariff.
2 You should buy units on the 1st of the month if you want to get the full free units, otherwise the amount you get drops throughout the month. You don’t have to buy on the 1st of the month to get free units.
Free units or free basic electricity is only applicable to customers on the Lifeline Tariff. Two free allocations are applied depending on the average level of consumption: an allocation of 60 units if you use less than 250kWh per month on average OR 25 units if you use between 250kWh and 450kWh per month. Free units are granted on your first purchase of every calendar month, irrespective of when that is.
3 You should buy units on the 1st of the month because the rate per unit increases as the month goes on. It isn’t cheaper to buy on the 1st of the month.
The City has an inclining block tariff which is refreshed every month, so if you only purchase in the first block, you pay the same amount; the higher cost of the second block kicks in once you reach the threshold of the first block.
4 You should buy as many units as you can in one go as they are cheaper in bulk. Buying in bulk is not cheaper! Only buy what you need!
You should only buy what you need in a given month – this will keep your costs down. When buying in bulk, you move onto the second block for units above the monthly usage threshold, which is more expensive. So, buying in bulk can be considerably more expensive.
5 You should rather make many small purchases in the month so that you stay within the cheapest block rate with each purchase. Many small purchases could cost you more!
The rate applied on each purchase is dependent on previous purchases in the month (it accumulates). Once the first block is bought up, you automatically move to the second block irrespective of the number of times you make a purchase.
6 Monthly totals are based on how much you use, not on how many units you buy at a time. It is about how many units you buy.
Prepaid meters are not intelligent meters. The meter merely accepts tokens and then reduces as the units are consumed. When buying electricity at a vending station, our computer server determines what has been bought previously in the month and what block rate to apply to the purchase of electricity for the given amount.
7 You pay more per unit when you use electricity in winter months or during peak hours in the evening. The price is the same no matter the time or season.
Residential tariffs do not differ according to the time of the day or the year when electricity is consumed.