<\/p>\n
While electricity tariffs charged by Eskom and municipalities are continuously scrutinised, vendors of prepaid tokens \u2013 who form part of the supply chain \u2013 fly completely under the radar.<\/p>\n
Consumers are not told which parties are involved in the delivery channel, nor what each of them charges. Some of these vendors however unlawfully add as much as 25% to the electricity tariffs, according to two experts in the field.<\/p>\n
Read\/listen:<\/p>\n
Eskom responds to industry concerns over electricity pricing
\nRamokgopa on what SA\u2019s first electricity pricing policy change in 17 years aims to achieve \u2013 and how<\/p>\n
The draft revised Electricity Pricing Policy (EPP) points out that such vendors are unregulated and the commissions they charge vary, \u201ccreating the potential for excessive fees and unfair margins\u201d.<\/p>\n
It proposes a standardised pricing framework and monitoring mechanism \u201cto ensure that vending fees are transparent, fair and consistent\u201d.<\/p>\n
Unlawful fees<\/p>\n
Chris Bosch, CEO of Rural Maintenance, which manages several electricity distribution services on behalf of licensees, points out that by law nobody is allowed to sell electricity at a tariff other than one approved by energy regulator Nersa.<\/p>\n
\u201cIn the municipalities where we work, we pay the vendor and the customer is charged the Nersa-approved tariffs.\u201d<\/p>\n
That is not always the case, however, he says. \u201cSometimes a consumer is charged R10 or R20 extra just to do the transaction.\u201d<\/p>\n
Imagine a poor consumer who wants to buy R50 worth of electricity at a time having to pay such a fee.<\/p>\n
\u201cSome charge whatever they want. I have seen commissions of up to 20%. In one shopping centre, we came across a landlord charging a meter-reading fee of R500, while that is already provided for in the approved tariff. If a shop owner questions it, they try to kick his business out.\u201d<\/p>\n
ADVERTISEMENT<\/p>\n
CONTINUE READING BELOW<\/p>\n
Read\/listen:<\/p>\n
Cosatu pushes prepaid electricity metering to save industry and jobs
\nGovernment proposes sweeping changes to power-price framework<\/p>\n
Bosch says every distributor should offer customers a no-cost option, allowing them to pay only the Nersa-approved tariffs, for example through a municipal app.<\/p>\n
If a consumer opts for a more convenient option for whatever reason, like buying electricity with a credit card or through their banking app, they should be prepared to pay a premium for the convenience.<\/p>\n
Commissions add up<\/p>\n
Ayal Rosenberg, managing director of WeBill, agrees that it is the rule in the industry, rather than the exception, to add commission onto the approved tariffs, although it is unlawful.<\/p>\n
There can be many role players in the chain and \u201ceverybody wants to get in on it, because it is so easy to make money\u201d.<\/p>\n
He cites two examples:<\/p>\n
A listed company charges a 9% additional commission, including value-added-tax (Vat), to the 120 000 middle- and working-class customers who use its vending platform. Of this, the metering company receives four percentage points, three of which cover real costs. The retailer \u2013 for example, a supermarket or bank \u2013 gets about three percentage points, while the company itself retains two.<\/p>\n
Another example is a metering company in the Free State with 25 000 meters in sectional-title units and electricity sales of about R25 million a month. It retains about R2 million a month (12% excluding Vat) as commission, of which R500 000 a month is paid to the retailer.<\/p>\n
Read:<\/p>\n
Nersa to study impact of changes in electricity tariffs
\nFlawed policy and tariffs deepen SA\u2019s municipal power crisis<\/p>\n
According to Rosenberg, vending commissions range from 13% to 25%, excluding Vat, and are added to the Nersa-approved tariffs.<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
The draft revised policy proposes that Nersa:<\/p>\n
Develop and implement a standardised pricing framework for electricity vending services within 12 months;
\nDefine allowable service fees and commission structures to prevent excessive margins;
\nEstablish a monitoring and compliance mechanism to ensure transparency and adherence to the framework;
\nConduct periodic reviews of fees and commissions to reflect changes in the market and technology;
\nMonitor vendors\u2019 compliance with the pricing and reporting requirements; and
\nInvestigate consumer complaints and enforce the framework through penalties or corrective measures where necessary.<\/p>\n
It states that implementing these measures \u201cwill ensure that prepaid electricity vending services operate in a regulated, transparent, and consumer-protective manner, while standardising vendor practices across the sector\u201d.<\/p>\n
Implementation risk<\/p>\n
Deon Conradie, an expert in electricity pricing, says the policy objective of bringing vendors into the regulatory framework and tightening the regime for resellers is particularly relevant to estates, landlords, body corporates, student accommodation and informal resale arrangements, where the effective price paid by the end user can materially exceed the underlying regulated electricity tariff.<\/p>\n
Read: Why your bills are rocketing beyond inflation<\/p>\n
He says this may be especially problematic in informal resale arrangements between landlords and tenants and with vendors in townships.<\/p>\n
Conradie is, however, concerned about the implementation of the policy, once adopted.<\/p>\n
\u201cImplementation, rather than policy wording, will determine whether it succeeds,\u201d he says.<\/p>\n
Conradie points out that the policy calls on Nersa to develop several frameworks, including one to regulate electricity vendors. This, he says, is where the risk lies.<\/p>\n
ADVERTISEMENT:<\/p>\n
CONTINUE READING BELOW<\/p>\n
\u201cThe [current] 2008 EPP already contained many sound economic principles that were simply never implemented fully after almost eighteen years.\u201d<\/p>\n
A changing market<\/p>\n
He adds that the revised EPP is intended to modernise the 2008 policy and align electricity pricing with the structural reforms currently under way in the sector.<\/p>\n
The fundamental change from the current EPP, which was adopted in 2008, reflects a move from an industry that revolved around Eskom, to a market-based industry with multiple participants.<\/p>\n
Read:\u00a0Eskom unbundling stalls as board digs in over lender complexity<\/p>\n
\u201cThe 2026 EPP explicitly says that South Africa is moving from a vertically integrated, monopoly-based system to an unbundled and increasingly competitive electricity market.<\/p>\n
\u201cIt recognises separate generation, transmission, distribution, retailers, traders, generators, aggregators, wheeling customers and market participants.<\/p>\n
\u201cThat is the conceptual foundation on which a functioning competitive electricity market has to be built.\u201d<\/p>\n
#unlawfully #charged #prepaid #electricity<\/p>\n","protected":false},"excerpt":{"rendered":"
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