- As a customer of the City of Johannesburg Municipality ("COJ"), you receive monthly electricity bills for your home or business. These accounts show the actual number of Kilowatt hours consumed and the cost of such consumption.
- Have you ever been in a position where your meter is not read, you are then charged estimates for a lengthy period of time and eventually when your meter is read, you get an astronomical bill for which you have not budgeted? If this has happened to you, this article will provide you with the solution that you need.
- Electricity consumption is determined by reading your electricity meter. This task is usually carried out by City Power. However, what should be done if your meter has not been read? Have you ever had a situation where your meter wasn't read for a month or more? What the COJ does in such circumstances is to charge for electrical consumption, which it calculates based on estimates.
- Eventually, when the meter is read, the COJ, in the account that follows the reading of the meter, conducts what is known as a back billing exercise. What it does is to deduct from the account all estimated charges that were imposed, and all payments made, to get back to the position as it was when the meter was last read.
- Having imposed these deductions, the COJ adds back the charges that should have been imposed, based on the meter readings that have now been obtained and then adds back the payments made in the interim period, to arrive at a new balance.
- This exercise should impose no hardship for so long as the period during which estimates where used is not lengthy and the estimates are equal to or higher than actual consumption.
- But life doesn’t always work like that and recently a corporate client of mine almost suffered significant harm in circumstances where it’s meter was not read for 30 months and when the meter was eventually read, it was found that the actual consumption of electricity was much higher than the estimate.
- My client is an industrial concern and a significant consumer of electricity. City Power, after installing a new meter In February 2019, failed to read the meter for 30 months, the meter only being read in August 2021.
- When the meter was read it was discovered that the estimated consumption and charges in a 30-month period were much less than actual consumption and after the back billing exercise was completed my client received an account in which it was charged a whopping additional amount of R4.4 million for the actual electricity consumed over and above the estimates charged.
- The problem is that consumers of goods and services budget for expenses based on the charges that are imposed, and my client, not knowing that the estimates were as badly wrong as they were, simply did not have R4.4 million spare cash to pay this account. Matters then got to a head when City Power threatened to cut off the electricity and my client had no choice but to enter into a payment plan to start paying this massive arrears bill.
- It does however seem unfair that the COJ, where it is negligent (through City Power) in failing to read a meter for an extended period and understating the estimated consumption, should be able to cause hardship by imposing back billing over an extended period and then saddle the consumer with an astronomical bill that is then required to be paid immediately.
- Fortunately there is a solution at hand.
- The supply of electricity by the COJ to its customers is regulated by a Municipal Bylaw, known as the Standardisation of Electricity By-Law of 1999 (“the By-Law”).
- I considered the By-Law and found an interesting section, being Section 9(7). Section 9(7) says the following: “When it appears that the customer has not been charged or incorrectly charged for electricity due to the application of an incorrect charge or on the grounds other than the inaccuracy of a meter, the Council shall conduct such investigations, enquiries and tests as it deems necessary and shall, if satisfied that the consumer should have been charged, or has been charged, adjust the amount accordingly: Provided that no such adjustment shall be made in respect of the period in excess of six months prior to the date on which the incorrect charge was observed, or the council was notified of such incorrect charge by the consumer."
- So, on my interpretation, even if my client had been undercharged for electricity consumption, and the COJ wanted to correct this by imposing an additional charge for the actual consumption of electricity, they could only do so for a period of 6 months prior to the meter being read.
- What we calculated in my client’s particular case, was that the cost of the additional electricity that they had used for the period February 2021 to August 2021 (the meter was read in August 2021) was an amount of R1.1 million. This amount fell within the 6-month period as contemplated by Section 9(7) of the By-Law and had to be paid.
- The additional cost of actual electricity consumption for the 24-month period prior to February 2021 was an additional R3.3 million. Applying my interpretation of Section 9(7), I took the view that my client ought not have been billed this amount. This was because even though they had consumed this additional electricity, the consumption related to a period more than 6 months before the mistake was discovered.
- We wrote to the COJ asking for a credit and when the COJ failed to respond, legal proceedings were instituted against the COJ for the credit. The COJ naturally opposed the case, and we ended up arguing the case late last year before a Judge in the Johannesburg High Court.
- Judgement was recently handed down and the Court agreed with the reasoning that we had adopted, being that where the COJ fails to read an otherwise functioning meter and then seeks to impose additional charges after the meter is read, the extent of the additional charges that the COJ may impose is limited to 6 months prior to the meter reading. On that basis, the Court ordered that the COJ credit my client’s account with R3.3 million.
- So if you find yourself in a similar situation, there is a remedy. There are, however, some provisos. The COJ adopts a “pay now and fight later” policy, so I would advise that you enter into a payment plan in relation to the alleged arrears and then go through the process, knowing that at some point your account will be credited.
- Also, the COJ’s Credit Control and Debt Collection Policy requires a party seeking a credit to lodge a succession of queries and complaints to the COJ, before initiating legal proceedings.
- So, if you find yourself at the receiving end of a large electricity bill because of City Power’s failure to read your meter properly or at all, there is a solution, and you need not resign yourself to paying an astronomical bill.
- On a philosophical endnote, I accept that an aspect of the current electricity account is the failure by people to pay their accounts. I do not advocate for one moment that electricity should not be paid for. The point is that there is an obligation upon City Power to read meters regularly on a monthly basis and for the COJ to deliver accurate accounts on a monthly basis. If for some reason this doesn’t happen, COJ as the supplier of electricity must be held accountable to ensure that consumers do not receive unexpected astronomical accounts, and Section 9(7) of the By-Law does exactly that.
Managing Director at A2Z (Africa) Logistics Advisory | Commodities and Trade facilitation | Specialist in Africa
1 年Great post Diaan. Consumers should be aware of it.
Great outcome - thanks for sharing Diaan. Certainly a situation that is bound to arise again and a matter to remember when it does!
Solicitor - Senior Associate at Lani Law, Rolleston
1 年Congratulations on the outcome Diaan and sharing your insights.
Sales Optimization Specialist | Facilitating Sales Growth
1 年This is an article that is insightful. Thank you Diaan Ellis
Managing Director Freitan S.A. (Pty) Ltd.
1 年Very insightful article Diaan.