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Prepaid meter furore — More proof that the government and Eskom just don’t get it

Prepaid meter furore — More proof that the government and Eskom just don’t get it
The furore over the prepaid meter update is a clear example of how a government and its entities should not communicate. It shows how those who run our electricity system are completely out of touch with realities on the ground. This will further undermine any attempts to legitimise the electricity tariff system and make it harder to convince people to pay for electricity.

The background to the prepaid meter issue is well known; essentially the system that issues codes to refill electricity meters (which are tied to the date and time) was going to run out of numbers at 20:15 on Sunday night, 24 November 2024. As a result, these meters had to have particular codes tapped into them to allow them to continue.

On paper, this is incredibly simple. The process takes less than a minute, and there were many months in which to do it. Even for a society that includes many people who have grown up without cellphones, it should not have been a problem.

Most elderly people have at least one younger person in their lives who would have been able to help them with this process. Instead, the result was long queues, a sense of panic, and in Soweto, one reported death.

None of this needed to happen, it was all avoidable.

The root cause of the feelings of panic was the threat from Eskom and others that if the meter was not updated, it would cost the consumer R12,000 to have it replaced.

This was always nonsense. 

As important reporting by News24 revealed, the authority that runs the software standard, the Standard Transfer Specification Association, said that meters would not have to be replaced.

The SA Local Government Association, representing local councils, made the same point. And it is still not clear how such a simple device could ever cost so much.

This means then that Eskom’s threat had no basis. And it was repeated many times by many people. 

One of those who repeated the Eskom message was the Minister of Electricity and Energy, Kgosientsho Ramokgopa. He spoke in public and gave interviews in which he repeated the same message.

Why would Eskom, and others, make this threat, if it simply was not true?

The only legitimate reason might be that Eskom was trying to get as many people as possible to update their meters, in an effort to find out which meters were involved in bypassing the payment system entirely.

In other words, some at Eskom might have seen this as a useful opportunity to crack down on non-payment.

Unfortunately, the net result of all of this is that there is going to be less trust in the system, with the result that fewer may end up paying than before.

This is because if it turns out that meters can be made to work after Sunday’s deadline, then Eskom will have been revealed to have lied.

And the spectre of the figure of R12,000 was an important part of this. As the meters are clearly not worth that, it would appear that either Eskom and councils were adding administrative fees, or were trying to recover some other costs.

Unfortunately the net result of all of this is that there is going to be less trust in the system, with the result that fewer may end up paying than before.

The simple fact of our current existence is that electricity is vital to people, and thus they will do anything to get it.

Price hikes in question


At the same time, as previously examined, the cost of electricity has risen out of all proportion to inflation in the last 10 years.

That people are hugely concerned about this was obvious from the fact that the National Energy Regulator of South Africa (Nersa) took the decision to cancel its Durban public hearings into Eskom’s price hike, because the venue was too small.

The hotel conference centre where it was scheduled could not accommodate the 300 people who arrived. 

This postponement could well have other consequences; the people involved in the process would have had to plan a long time ahead (the hearings take place in different parts of the country over a period of more than a week). Getting them all in the same room again might be difficult. And the clock is ticking, Eskom will argue that it needs the money.

At the same time, other factors are undermining the legitimacy of this process.

Just as Nersa was starting this group of hearings, Ramokgopa suspended its full-time member for electricity, Nhlanhla Gumede. 

On 702’s The Money Show he refused to explain why he had done this, saying it was at the request of the Nersa board.

This is an astonishing development. It means that a minister has suspended the most important person in an independent regulator, just as it was about to make a crucial decision.

While a replacement has been appointed, and Nersa can still legally make the decision, the process will surely be delegitimised further.

Power disconnect


But this is all part of a much bigger problem, which is that the processes and systems that determine electricity tariffs have become too complicated, with too many role players.

On Sunday, the chair of the SA Independent Power Producers Association, Brian Day, told the Sunday Times that Nersa is not playing the role it should in moving the country forward to better systems. He also sharply criticised the current legislation.

As has been stated many times, the current tariff system is simply too complicated (the current Eskom Tariff And Charges booklet is fully 60 pages long) and involves too many people.

But tariffs are also trying to do too many things, including providing revenue for councils. If this function were removed, electricity would be much cheaper, but councils would have no revenue.

All of this points to a situation which is becoming unsustainable. While there is no more load shedding (although there is still load reduction), there is also no more money.

And certainly there is no willingness to pay it.

Two weeks ago Business Live columnist Jabulani Sikhakhane quoted the Indian economist Kaushik Basu writing about government bureaucracy in that country. Basu said that for people inside the government, “it is psychologically very difficult to appreciate what life is like outside” simply because they have got so used to life inside the system.

The situation here is now very similar. The people who make decisions, and in this case threats, have no understanding of what life is like for most people.

The furore over these prepaid meters is proof of that. DM

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