City Power says people are stealing electricity by bypassing smart meters. (Picture: Moritz R | Unsplash)
Joburg’s power utility, City Power, has paused converting postpaid to prepaid meters as it admits to billing issues, stating it needs to audit its customer database to identify customers who are getting free power.
In a statement issued by Isaac Mangena, general manager of the Department of Public Relations and Communications, the utility says it is extending the temporary suspension of the conversion of postpaid to prepaid meters, which was initially put into place last November.
Mangena’s statement explains that the suspension formed “part of a comprehensive review of the conversion process, customer account verification systems, and revenue protection measures aimed at addressing operational irregularities and strengthening governance controls”.
While it had aimed to continue with the switchover at the end of last month, it has now admitted that it needs to finalise “applicable rules, policy framework and corrective measures”. City Power says it will only consider resuming these conversions once it’s happy that the revised controls have been fully implemented.
Last September, it said it was halting the project until November to “allow for a thorough review of the conversion process and ensure future conversions are handled accurately and fairly”.
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City Power initially announced a smart meter project in 2013, at which time it was set to spend R1.2 billion on rolling out a million units in a bid to resolve ongoing billing issues. The current project commenced three years ago.
According to the City of Johannesburg’s website, the utility is converting all electricity meters to prepaid, enabling customers to manage their own consumption. National Treasury is also in the midst of plans to roll out smart meters nationwide to improve billing accuracy, while Eskom has deployed 1.86 million smart meters across the country so far as it aims to cover 6.2 million homes with intelligent devices by March 2029.
City Power has now identified issues including that customers are converting to prepaid meters without following approved processes, in some cases allegedly with the assistance of employees acting outside authorised procedures.
Mangena also says it is dealing with customers who claim to have converted but are not registered on prepaid systems, and legitimate prepaid installations that were later tampered with or bypassed. “Investigations have also identified customers who claim to have converted to prepaid but are not officially registered on prepaid systems.”
City Power also says it has found non-vending accounts and cases where customers are purchasing significantly less electricity than expected because of suspected meter tampering, resulting in electricity consumption that is not accurately recorded or billed.
City Power has an infrastructure backlog of R44 billion. (Created by GenAI)
The utility says it is currently “reviewing and strengthening its conversion processes to ensure that all prepaid meter installations are properly approved, verified and linked to smart metering technology capable of remote monitoring and improved revenue protection”.
As part of the process, City Power will audit and clean up its customer database to verify customer records, improve billing accuracy and ensure customers are correctly registered and billed for the electricity they consume.
“Any customer found to have bypassed their prepaid meters will be converted back to a postpaid system and rebilled for the full period during which tampering or irregular consumption occurred,” the utility says.
A year ago, City Power announced it was taking over the billing process from the City of Johannesburg to address residents’ frustrations with inaccurate accounts and disputed meter readings.
However, the Auditor-General’s latest Consolidated General Report found City Power had incurred R11.82 billion in irregular expenditure since 2021/22, with R9.20 billion written off. The metro faces financial and liquidity constraints driven by weak revenue collection, ageing infrastructure and electricity distribution losses, compounded by governance weaknesses, Tsakani Maluleke’s report says.
Johannesburg’s financial mismanagement, including billions of rand in unpaid bills, this week prompted National Treasury to withhold infrastructure grant funding until the city demonstrates sustained compliance, accountability and financial reform.
City Power’s first quarter report shows it continues to face significant energy losses, with an infrastructure backlog of R44 billion, and it takes an average of 14 hours to resolve interruptions.
Mangena adds: “The review process is aimed at protecting the integrity and sustainability of the electricity network, improving accountability and ensuring fairness for all paying customers.”
Organisation Undoing Tax Abuse executive director and lawyer Stephanie Fick told ITWeb that, while tackling fraud, meter tampering and revenue losses is essential to protect municipal electricity finances, it must be accompanied by transparency, fair administrative processes and clear communication with affected customers.
The Auditor-General found billions in unauthorised spending across SA. (Created by GenAI)
“Where tampering, fraud or collusion is identified, those responsible – including any implicated officials – must be held fully accountable,” says Fick. She adds that customers accused of irregularities must be afforded due process, including access to the evidence against them and a fair opportunity to respond before corrective action or rebilling is implemented.
Fick notes: “The integrity of the electricity network depends not only on robust technical controls, but also on consistent governance, accountability and equitable treatment of consumers.”
City Power apologised for “any inconvenience caused,” saying existing prepaid and postpaid customers would continue to buy electricity and receive services as normal, with supply unaffected during the suspension.
