Prepaid power: Are you paying 25% more than you should?
Government wants to get a grip on rogue electricity vendors.
While electricity tariffs set by Eskom and municipalities are frequently examined, vendors who sell prepaid electricity tokens often go unnoticed. These vendors are part of the electricity supply chain but their charges are often undisclosed to consumers, and some are found to be unlawfully adding up to 25% to the approved electricity tariffs.
Two industry experts have revealed that the Electricity Pricing Policy (EPP) draft highlights these unregulated vendors, whose commission fees vary, potentially leading to excessive fees and unfair margins. Chris Bosch, CEO of Rural Maintenance, explains that although he pays the vendor and the customer is charged Nersa-approved tariffs, sometimes consumers are charged extra, such as R10 or R20, for the transaction.
He suggests distributors offer customers a fee-free option, enabling them to pay only the Nersa-approved tariffs, typically through a municipal app. Ayal Rosenberg, managing director of WeBill, confirms that it is common for commissions to be added to the approved tariffs, even though it is unlawful. He gives examples of a listed company charging a 9% commission to its middle-class customers, and a Free State metering company retaining about R2 million a month (12% excluding VAT) as commission for electricity sales of R25 million a month.
The draft revised EPP proposes that Nersa should develop a standardised pricing framework for electricity vending services within 12 months, define allowable service fees and commission structures, establish a monitoring mechanism to ensure transparency, conduct periodic reviews of fees and commissions, and monitor vendor compliance with pricing and reporting requirements.
This is aimed at ensuring prepaid electricity vending services operate in a regulated, transparent, and consumer-protective manner. However, Deon Conradie, an expert in electricity pricing, warns that implementation of the policy poses a significant risk. He says the policy's success will depend on how well Nersa can develop the necessary frameworks and enforce the regulations, especially in informal resale arrangements.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
