“Unfortunately, the exact details of how any particular electricity bill is calculated can be so complex it’s difficult for even experts to understand. At Citiq Prepaid we do some very complex calculations to make sure we’re charging every user the right tariff, no matter where they are or when or how much electricity they are charged. Our goal is to make things fair and transparent for everyone. We help landlords collect what they owe to the municipality or Eskom, not to make a profit on the selling of electricity.”
In the long term, Franze says the real solution is for Eskom, municipalities and the National Energy Regulator to design simpler consumer tariffs. But in the meantime, there are three basic pieces of information that can help consumers to make sense of their electricity bills.
“Firstly, your charges will vary depending on where you live. If you get your power directly from Eskom, which is the case in many rural areas and in Soweto, for example, you will be charged according to a different system than if you get your electricity from a municipality. And each municipality has its own system as well,” he says.
For example, in Cape Town people with homes valued at over R1 million pay a basic home user charge that covers the cost of keeping them connected, no matter how much power they use, some municipalities like Ekurhuleni have different tariff systems depending on how much a household uses in a month, and different municipalities charge different rates for a unit of electricity. So it’s important to check what your own municipal system is.
Secondly, Franze says it’s helpful to understand the incline block tariff (IBT) system. “Basically, this means that the more electricity you buy in a month, the more you pay. In the case of prepaid customers, it has nothing to do with how much you actually use - the cost is purely based on how much you buy. This means that electricity is one of the rare cases where it’s really not a good idea to buy in bulk. Rather buy from week to week, or buy just enough at the beginning of each month to keep you going. It’s cheaper to top up with a few units at the end of each month than to buy enough to last you for two months.”
Thirdly, consumers should understand exactly what they’re getting when they buy a unit of electricity. “The terms can get confusing, but when you break it down it’s actually quite simple,” says Franze.
“The amount of power any appliance uses, also called its power rating, is measured in Watts (W), and this is always marked on the packaging or somewhere on the appliance. So an energy-saving lightbulb might use 20W and an iron would be around 1 000W or 1 kiloWatt (kW), for example. A unit of energy, which is measured in kiloWatt hours (kWh), is just the amount you need to run a 1kW appliance like an iron for one hour. So your unit will last a long time if you’re using appliances with a low power rating, or get used up really fast if you’re using more power-hungry appliances. A good general rule is that the more heat an appliance generates, the more power it uses.”
Franze says this means there are two ways to save electricity: