Nelson Mandela Bay has plan to address prepaid meter headache

Nelson Mandela Bay City Hall
METER MATTERS: Nelson Mandela Bay City Hall

With more than half of Nelson Mandela Bay’s prepaid meters either blocked or likely tampered with, the municipality’s electricity and energy department wants to install an advanced metering infrastructure system to combat rampant electricity theft.

If approved, ultimately by the council, it could generate R1.7bn in five years if 80,273 electricity meters were unblocked, 83,770 inactive meters restored and with changes to the credit policy.

An energy and electricity report, meant to be debated at a mayoral committee meeting on Wednesday, highlighted that measures implemented by the municipality to get ratepayers to pay were detrimental to the city’s coffers. 

The report on the number of meters blocked and inactive was based on samples taken in September 2022.

The projected R1.7bn income is calculated based on an assumed average annual tariff increase of 10% for the next five years.

It was brought to a mayoral committee meeting on March 4, but chief financial officer Selwyn Thys said the budget and treasury department, and energy and electricity department, would meet as it had financial implications.

A month later, this has yet to happen.

The report, written by electricity and energy executive director Luvuyo Magalela, who has since stepped in as acting city manager, said the advanced metering infrastructure (AMI) system allows municipalities to collect real-time electricity usage from customers remotely.

“To provide strengthened confidence in the ability of the department to indeed realise this additional income as demonstrated, advanced metering technology will be implemented as one of the measures aimed at protecting electricity revenue.”

The department has installed 5,000 smart meters in the city so far allowing the city to measure a customer’s actual usage as opposed to purchases.

“This is a crucial benefit as many households and businesses could be engaging in partial tampering.

“That is a practice where just enough electricity is purchased to ensure that the meter in question does not get flagged as ‘no-purchasing’ or ‘tampering’.

“An AMI system will allow the municipality to experience and improve the ability to identify exact outage locations, track and isolate outages, monitoring of load and voltage levels, assisting in improvements in asset utilisation and maintenance programmes.

“To realise a potential R1.7bn in domestic electricity sales revenue over five years, R543m is required over the same period.”

He said blocking a meter due to arrears for other municipal services worsened hardships, rendering customers unable to meet the most basic household needs.

“It is likely that, should the meter not have been blocked, they would have made means to at least continue to buy electricity.

“It is often at this desperate point that an account holder would resort to bypassing the meter to continue running the household.”

According to the report, this has played out in thousands of households where 80,273 meters are blocked on the prepayment electricity vending (PEV) platform.

“This means that while 80,273 meters have been blocked, a further 83,770 meters did not make any electricity purchase for at least 30 days [in 2022].

“The most likely assumption to arrive at when a household does not buy electricity for an extended period, without it being blocked, is that it has resorted to bypassing [tampered] the meter.”

According to the report, blocking prepaid meters as a credit control measure unintentionally fuels electricity tampering and contributes to overall electricity losses.

The city’s electricity losses have for years been earmarked as a significant factor eroding the sustainability of electricity as a profitable commodity, increasingly threatening its viability.

During the 2022/2023 financial year, non-technical electricity losses amounted to R697m.

Non-technical losses can be attributed to theft, that is, illegal connections, meter tampering and non-billed revenue due to faulty meters.

“An ideal situation would be one where all blocked and tampered meters have been restored to a position where electricity purchases can be loaded and legitimate consumption can occur within a dwelling,” the report reads.

A second option presented was load reduction.

This measure, Magalela said, could be executed via the distribution control room to mitigate the risk of regional or local blackouts when demand surpasses the capacity of the available power system.

A case study was conducted in October 2022 to assess the viability of implementing load reduction as a possible option to address non-technical losses in Ward 29, which includes Booysen Park and Bloemendal.

The ward was used as a benchmark and it was found that about 5,654 meters reflected no purchases in October 2022.

The ward has 8,164 meters installed.

During a three-hour peak demand analysis, electric tampering resulted in a loss of R10,246.

In the report, Magalela proposed that:

  • The prepaid vending system be placed under the control of the electricity and energy department to allow for increased control and access to infrastructure;
  • Amend the city’s credit control policy to be less restrictive;
  • The impact on electricity losses resulting from proposed credit control policy changes be monitored for three months and a report be submitted to the mayoral committee;
  • That capital budget funding be sourced to start a five-year electricity meter replacement programme; and
  • Load curtailment as a method of limiting non-technical losses be tested on a pilot basis.

The current credit control policy sees electricity meters blocked when accounts of R400 are in arrears for more than 60 days.

Magalela has proposed that the credit control policy states that meters will be blocked when an account holder is in arrears of up to R2,000, and for partial blocking to be used after an account has been in arrears for other services after four months.

Partial blocking is when the metro deducts a certain amount of money owed when buying electricity. 

During the meeting, councillors were meant to discuss budget amendments for the 2023/2024 financial year.

However, mayor Gary van Niekerk had been excluded from budget discussions before the meeting.

ANC councillor Buyelwa Mafaya said she was concerned Van Niekerk had no idea what was contained in the budget adjustment report.

“The budget is his,” Mafaya said.

“This means before anyone else gets to understand what is in the budget, it should start with the mayor.”

Van Niekerk said when they started consequence management against officials, they were accused of victimising them.

“We have been very lenient until now.

“We are at a point where we’re almost begging the executive directors to do their jobs.

“I hope there’s quick a resolution to this matter,” he said.



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