Prepaid or Conventional meters for dummies

Posted by Echardt on January 22nd, 2015

I am venturing into this highly contensious field in effort to assist users of electricity with a basic understanding how these meters and systems work and hope that this will assist you to make ‘informed’ decisions should you consider changing your metering type.

Let’s start with the conventional meter.

The “normal” meter that most of us are familiar with works just about the same as your motor car’s odometer (distance meter). It may come with normal mechanical digits or with an electronic display and it measures and displays how much electricity has gone through it in kiloWatthour or kWh in short. Thus one can say they work in ‘hind sight’ so to say. One has therefore to take down readings from the read-out from time to time in order to work out the kWh usage (the difference between the two readings). If the meter is connected to technical devices such as ct’s (devices that slow down the recording in a specific predetermined ratio), the appropriate ratio must be applied to the difference between the readings in order to calculate the correct usage. For example, a ct with ratio 250/5 requires the difference between two readings to be multiplied by 50 to get the correct usage. CT’s are mainly used in situations of very high usage in order to prevent a meter from cycling more than once (going beyond the maximum read out of the number of digits in operation …for example to go past 99999 to 00001) before one has time to take down the next reading again. The “usage” is now multiplied by the set cost as per the tariff you are supplied under in order to determine the reading period’s cost. Obviously, if other components form part of the tariff, those will have to be added to the kWh charge cost in order to make up the total bill.

Pre-Paid Metering.

Pre-paid meters work a bit differently. It is an electronic device that must be able to either communicate with the energy vendor’s computer network in order to operate or work from an interface (card / electronic program reader, etc) in order to recognize an instruction. Therefore it represents a scenario wherein energy is paid for upfront. This energy is paid for upfront at a tariff that may be either the same or different to that used in conjunction with conventional meters and therefore may not hold a saving in for you.

There are basically two cenarios at play with regards to pre-paid metering. Firstly, you may reside in an area or building where electricity is being supplied to each individual end user directly from the Supply Authority (Eskom or the Municipality). In other words, the Distributor is also the Vendor. The meter belongs to the local Supply Authority and not the landlord/owner and is being maintained by them.
The Second scenario is where there already is a bulk electricity supply point in place from the local Suply Authority to the property with it’s own account ( normally in the name of the developer or Body Corporate/Home Owners Association….called the Account Holder) and you are using electricity via prepaid meters that are privately owned and privately maintained. The Vendor is NOT the local Supply Authority and he, in turn, collects electricity sales revenue on the property on behalf of the Account Holder and submits this, less his share, to the Account Holder at certain intervals so that the Account Holder can settle the electricity account of the local Supply Authority every month.

In the First scenario, the Supply Authority receives your payment and dispences a ceratin amount of electricity to your meter either by means of a physical intervention (card) or electronic reader (key board entry). Should the meter become faulty, the Supply Authority is responsible to replace the meter and refund you with the un-used energy.

In the second scenario, the landlord or Account Holder (which ever the case) has to install the meter at his own cost. Should the meter become faulty, the landlord/account holder has to replace it with another and he then is responsible to refund you the unused energy if he or his vendor has the capability to interrogate the damaged meter and download the necessary data from the meter in order to do so.

Over and above this, the landlord/account holder and the vendor has to set an internal tariff at which they sell electricity to you. This would normally have to cover the Supply Authority’s account as well as all other costs involved in installing, managing and maintaining the prepaid metering system and does not fall under the controll of the local Supply Authority nor NERSA (in South Africa the Electricity Act is silent on this matter at present …July 2014).

In the event where the prepaid system belongs to the landlord or account holder, the property as a whole most likely already receives an electricity account monthly from the local Supply Authority. As you may know, local supply authorities do not read all their meters every month and use a system where they estimate accounts for a period (2 to 3 months) till they are able to read the meter again. Hence, the estimated accounts may either be higher or lower than the actual usage or sales via the pre paid vendor, causing shortfalls/over recovery every now and then. This eventuality will have to be catered for internally by the Account Holder as the local Supply Authority will not get involved in the property’s internal electrical matters. If not planned for, this may lead to electricity interruptions to the premisis due to disconnection for non-payment and most likely will come with penalties on top of the outstanding account.

My advice to you is to thoroughly investigate the supply method in your area before you decide on changing over to a prepaid system. Make sure that the process of setting electricity charges at the private Vendor is transparent and that he has the capability to interogate and download data from damaged meters. Make sure that you know what the actual meter cost and the installation cost would be. Make very sure that you clearly understand the agreement you as Account Holder has to enter into with the Vendor (contract period, profit margins, points of sale, payment periods, refund parameters, notice periods, what if you want to change Vendors, etc) and that you have the capability to replace damaged meters when necessary. Remember, you need to plan for when things go bad and not only for when all is smooth sailing!

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