As the cost of living rises, families seek ways to adjust their lifestyle more in fitting with their income and expenses. Alongside has been a growing dissatisfaction with the ‘estimated’ billing method by municipalities for water and power use. The latter often leads to stressful legal disputes between city councils and customers, and in some cases this can lead to the customer being ‘shut off’ before queries are settled.
This has led to the growing demand for prepaid meters, be those for power or water. Prepaid electricity meters were introduced in South Africa in 1990, and water meters were piloted in 2003. Since those years, much has changed with the models, and the technology will continue to evolve with the introduction of ‘smart’ meters (insert the link to the article on Smart meters submitted this month).
Being smarter means being more aware of how we use the country’s limited water supply and reduce our electricity consumption, and nothing works better for awareness than having to pay for what you need ahead of time rather than paying for what you’ve used after the fact when you have no control. Many studies confirm that there exists a positive and beneficial link between prepaid metering systems and customer satisfaction, as well as a reduction in usage as households better understand how consumption impacts their budgets.
Prepaid meters are also seen as a massive mitigator to global and local climate change and will lessen SA’s dependence on fossil fuel-generated electricity—which is a major contributor to carbon emissions—and our escalating water crisis.
Approach to prepaid
The latest shift in demand towards prepaid is largely coming from Sectional Title scheme owners who rent out their property and property managers. These pay-as-you-go meters encourage the user to take responsibility for their wastage and remove the need for landlords to bill their tenants who may default on their payments. All can then more predictably manage their cash flow and reduce administration loads.
Another benefit is that property values and attractiveness may increase because some tenants prefer the predictability and control they can enjoy relative to usage.
In some cases, entire Sectional Title schemes are being built to include prepaid sub-meters. This allows for the accurate measurement of individual unit consumption and makes it far easier for the Body Corporate (BC) to bill each owner or tenant. The BC ultimately remains liable for the bulk utility bill from the service provider, be that the municipality or Eskom, but is restricted in that it cannot disconnect because a tenant hasn’t paid their levies. Sub-meters can also be added at any time to a Sectional Title scheme provided there is consensus by a special resolution.
Summarising the benefits of prepaid meters
- Budgeting: Buying power and water upfront means consumers can avoid unexpected high bills and manage their household expenses better.
- Flexibility: Users can choose when and how frequently they will buy credits, and across different platforms, be those online, through mobile devices, an arrangement with a prepaid provider, or at retail outlets.
- Real-time monitoring: Consumers can track their consumption and adjust how they use the electricity and water, and when given the different pricing structures between peak and non-peak hours.
- No threat of disconnection: Unpaid utilities with the service provider can result in disconnections.
- Billing: The hassle of collecting and invoicing for water and power is completely removed.
- Accountability: Encourages a more mindful approach to using resources, in line with climate-change agendas.
- Landlord management: The threat of renters defaulting on utilities is minimised or removed completely.
- Leak detection: Meters help in the early detection of water leaks.
- Potential for levy savings: Residents in ST schemes using sub-meters throughout could enjoy a reduction or lower levy increases. Generally, electricity and power usage of common property is shared across all units, so there is more transparency in the billing.
Disadvantages of prepaid
- Manual input: The current standard meters require users to manually top up their meters by purchasing tokens.
- Offline vendors: Some vendors experience downtime of the service providing tokens, which can impact the purchaser if water and electricity are needed in an emergency.
- No records: Standard meters do not record previous purchases, so the user will need to track their consumption manually.
- Installation costs: Setting up prepaid may mean the consumer will have to pay for installation, although some municipalities offer the service at no charge.
- Vulnerabilities: Unscrupulous vendors may charge inflated prices, especially to those who are in a desperate situation.
It is evident that individual metering is a better way to manage and monitor water and electricity supply. Households within a ST scheme should ask their Trustees to present this to the BC at either a special meeting or the next annual general meeting. Before doing so, however, it is best to contact a specialist who is able to field all questions and provide a quote.
