The individual customer’s promise to pay is the basic element of trust in an economy. Without his reliability there can be no capital at risk — all transactions have to be guaranteed by the federal treasury.
Failure to pay water and electricity bills is the biggest source of bad debt in South Africa. There is so much money owed for so long that the federal government cannot pay or forgive these bad loans.
Inevitably, electricity and water are just running out in South Africa. Because too many individual customers do not pay their bills.
Municipal consumer debt has a number of potential impacts. It can cripple the cash position of municipalities and, therefore, their ability to fulfill constitutionally mandated responsibilities. Municipal consumer debt can also reduce the finance available for the delivery of basic services, infrastructure, maintenance and upgrading. In addition, it can prompt the need for greater crosssubsidisation from richer households/businesses, potentially overburdening the existing tax base.Outstanding payments also represent foregone resources that could be used to improve the living conditions of the poor. Possible reasons as to why this type of debt arises are various. Poor performance by municipalities, such as inaccurate billing, weak credit control measures and customer service mechanisms may serve to reinforce non-payment, as those consumers able to pay become unwilling to pay.
On the other hand, consumers may be unable to pay as a result of unemployment and poverty. The causes of non-payment in South African municipalities have been the focus of various studies, including Booysen (2001), Botes and Pelser (2001), Burger (2001) and Fjeldstad (2004). However, as most of the studies were carried out in the early to mid-2000s, changes in the local government sphere warrant a thorough and updated investigation of the factors that drive this kind of debt.
SowetanLive.co.za – 18 Apr 2012 –
Why people have to steal power
“I have been living in this area for nine years.. We continue to connect electricity illegally because we need it and we are not getting any help from the authorities”
NOZIPHO Rwacaza cannot wait to have electricity in her home.
Rwacaza, 47, said she was saving money to buy a cable to power her shack in the Bambayi informal settlement in Snake Park, Soweto.
“We know it is illegal, but what can we do? I have a fridge, a stove, a television and other electric appliances, but I can’t use them because I do not have electricity,” she said.
“My food goes rotten. I do not have a job and buying small quantities of food is more expensive. So you see, there is nothing we can do. We need electricity.”
Rwacaza said illegal connections would not stop.
“We continue to connect electricity illegally because we need it and we are not getting any help from the authorities,” Rwacaza said
“I have been living in this area for nine years. When I arrived there were shacks here already.”
Advance Ndlovu shares a three-roomed shack with his girlfriend, Makhosazana Kubeka, their 11-year-old daughter Jabulile and his brother Lindelani.
“Many people have died in shack fires because they used braziers to warm their shacks. They forgot to take them out once they were warm and the shacks caught fire. If we had electricity, such tragic deaths could be avoided,” Ndlovu said.
The couple claimed that they used a generator, but Sowetan spotted cables near their shack.
“We use a primus stove for cooking,” Kubeka said, adding that Jabulile did her homework before it became dark.
But illegal connections annoy residents who pay for electricity because they say it causes power failures in the area every now and then.
Comment: …because it is expensive
Comment: …because millions can hardly afford food
Comment: …because you don’t care about their well-being
Comment: …because you have promised them lies
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Free Basic Electricity (FBE): What does it entail?
Free basic electricity is the amount of electricity, which is deemed sufficient to provide basic electricity services to a poor household. This amount of energy will be sufficient to provide basic lighting, basic media access, basic water heating using a kettle and basic ironing in terms of grid electricity and basic lighting and basic media access for non-grid systems. The levels of service are 50kWh per household per month for a grid-based system for qualifying domestic consumers, and 50W per non-grid connected supply system for all households connected to the official non-grid systems.
(SOURCE: Department of Minerals and Energy, Frequently Asked Questions on Free Basic Electricity. www.dme.gov.za)
How much is 50kWh and what can be done with this amount of electricity?
The 50kWh is equivalent to energy necessary for a month of basic lighting, small black and white TV, small radio, basic ironing and basic water boiling through an electric kettle for grid-connected consumers.
For pre-paid meters a household will be provided with a non-interchangeable voucher or token loaded with free basic units per month. When the free units have been used up, the consumer will need to buy additional units at the prevailing approved rates.
For credit-metered customers, the total units consumed will be reduced by the amount of free basic units. For credit-meter customers, it is not easy to see when the free units are exceeded.
Who is responsible for the provision of the free basic electricity?
National Government will provide policy and guidelines in respect of free basic electricity. Local Government will be responsible for implementation of the FBE with the aid of guidelines from National Government
How will non-grid electricity customers benefit from the free basic electricity policy?
Of all available non-grid systems, only Solar Home Systems that are currently installed as an alternative to grid electricity under the National Electrification Programme. Solar Home Systems (non-grid) are unique in the sense that they produce energy on site from sunrays. Most of the cost of Solar Home Systems goes towards maintenance and operation. A capped maintenance and operational cost of R48 per month will be made available to subsidize households connected to Solar Home Systems under the National Electricity Programme. Consumers will be expected to pay the balance between the subsidy and the prevailing tariffs. Other technologies are still being investigated. Criteria for other systems like mini-grids and hybrid systems will be developed as such systems are approved.
What will be done with people who do not have the infrastructure to get the free basic electricity?
Presently the Department of Minerals and Energy is progressing with the electrification of households in un-electrified rural and urban areas in order to achieve the goal of Universal Access to electricity under the Integrated National Electrification Programme. The free basic electricity policy is intended for consumers who are already connected to electricity systems. It is worth noting that Value Added Tax (VAT) has been removed from paraffin to provide affordable alternative energy for poverty relief to un-electrified poor households.
When is the free electricity going to be provided?
It is not intended to provide free electricity but free basic electricity. Free Basic Electricity commenced in a phased manner from July 2003, after Municipalities had received their funds from the Department of Provincial and Local Government.