TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentral TechCentral
    NEWSLETTER
    • News

      Huge Group to acquire what was Virgin Mobile in South Africa

      6 July 2022

      TechCentral needs your help – 2022 reader survey now live

      6 July 2022

      Call for ‘energy emergency’ to end load shedding

      6 July 2022

      What South Africa can learn from India’s IT boom

      6 July 2022

      Where to next for Dimension Data

      5 July 2022
    • World

      China accuses US of ‘technological terrorism’

      6 July 2022

      Scientists at Cern observe three ‘exotic’ new particles

      6 July 2022

      Bitcoin’s first African adopter plans own digital currency

      6 July 2022

      Bitcoin hints at a bottom – but it may be different this time

      5 July 2022

      China, US war of words erupts over lunar missions

      5 July 2022
    • In-depth

      The bonfire of the NFTs

      5 July 2022

      The NFT party is over

      30 June 2022

      The great crypto crash: the fallout, and what happens next

      22 June 2022

      Goodbye, Internet Explorer – you really won’t be missed

      19 June 2022

      Oracle’s database dominance threatened by rise of cloud-first rivals

      13 June 2022
    • Podcasts

      Demystifying the complexity of AI – fact vs fiction

      6 July 2022

      How your organisation can triage its information security risk

      22 June 2022

      Everything PC S01E06 – ‘Apple Silicon’

      15 June 2022

      The youth might just save us

      15 June 2022

      Everything PC S01E05 – ‘Nvidia: The Green Goblin’

      8 June 2022
    • Opinion

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022

      A proposed solution to crypto’s stablecoin problem

      19 May 2022

      From spectrum to roads, why fixing SA’s problems is an uphill battle

      19 April 2022
    • Company Hubs
      • 1-grid
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»Sections»Energy»City Power plan could cost businesses in Johannesburg dearly

    City Power plan could cost businesses in Johannesburg dearly

    Energy By Staff Reporter31 May 2021
    Facebook Twitter LinkedIn WhatsApp Telegram Email
    Johannesburg skyline. Clodagh Da Paixao/Unsplash.com

    The City of Johannesburg plans to take over electricity distribution in part of the city from Eskom, a move that will be very costly for business, the Association of South African Chambers (Asac) has warned.

    Eskom currently handles distribution for 38% of the city’s area of jurisdiction, including Sandton, Bryanston, Waterfall, Fourways, Sunninghill, Diepsloot, Cosmo City, Ivory Park, Orange Farm and parts of Soweto.

    A tariff comparison by Asac shows that a factory running 24 hours a day, seven days a week and supplied directly by Eskom was paying R46-million in 2020. If the same factory was situated in a City Power distribution area, its cost would have amounted R71-million for the same period. City Power is Johannesburg’s power utility.

    We came from the premise that as the city we are better positioned to manage service delivery in totality

    According to Ayal Rosenberg, MD of WeBill, small residential users may benefit slightly from a move away from Eskom.

    While there is a large number of such users in Soweto, residents in the area are also notorious for failing to pay their Eskom bills. Soweto’s arrear debt to Eskom was R13.2-billion by December last year.

    According to city spokesman Nthatisi Modingoane, the city “has started a process of negotiations with the view of taking over electricity supply service to the areas in the City of Johannesburg currently supplied by Eskom”.

    Negotiations

    The negotiations started in July last year and included representatives of Eskom, minister of public enterprises Pravin Gordhan, the department of mineral resources and energy, the department of cooperative governance and traditional affairs, the Gauteng provincial government, and the city’s executive mayor Geoff Makhubo and councillors, Modingoane said.

    Several working committees have been established to look at aspects such as the social, financial, human resources and statutory implications, as well as the process to be followed.

    Modingoane said the city already provides other services – including water, refuse removal, road maintenance and health care – in these areas.

    “So, we came from the premise that as the city we are better positioned to manage service delivery in totality which include electricity in those areas.”

    He added: “The other reason is that when people in those area do not receive adequate services including electricity, they complain and march to the City of Johannesburg not Eskom, and our councillors were attacked in the past and had their homes petrol-bombed by residents protesting against Eskom’s problems with electricity supply.

    “So, the reasons include that there will be a reduction in number of protests, and risks faced by councillors who can now address electricity challenges with authority and not always refer customers to Eskom. There will be improved credit management and collections rate through the city by-laws,” said Modingoane.

    Matters like the Soweto debt, profits to be made in Sandton, assets, employees and systems are being addressed in the ongoing negotiations

    Matters like the Soweto debt, profits to be made in Sandton, assets, employees and systems are being addressed in the ongoing negotiations, he said.

    Asac’s David Mertens says in principle it would be a good thing if all end users in the city were supplied by the same distributor, but City Power is hugely inefficient. The city should improve its operations before expanding its area of distribution, said Mertens.

    In a recent presentation to energy regulator Nersa, Asac showed that City Power’s energy losses increased from 19% in 2017 to 27% in 2019. Mertens says the way municipal electricity tariffs are currently being determined is irrational. If that is rectified, the City Power and Eskom end-user tariffs won’t differ as much, he says.

    Mediation

    Asac is engaging Nersa on the matter.

    City Power’s expansion plans come as it is engaged in a mediation process at Nersa after Trusted Utilities lodged a wide-ranging 28-page complaint against it. Trusted Utilities consultant Rene Kilner lists among others the following complaints:

    • City Power fails to apply the correct tariffs and only corrects them from the date of application for a different tariff by the end-user, and upon payment of an application fee;
    • It fails to properly maintain infrastructure according to basic regulations and safety standards, which results in damages to consumer equipment and loss of production and revenue, which the consumer is not compensated for;
    • City Power retrospectively and fraudulently adjusting job cards to correspond with incorrect billing data;
    • City Power’s infrastructure database is only about 65% correct, but even the 65% does not contain data to show it is correctly programmed and that the correct tariffs are being applied.

    Johan Hopley, chair of the Electricity Resellers’ Association (Erasa), says its members battle with the city’s incorrect billing daily.

    One member, who administers 30 complexes in the city, estimates that the billing is incorrect for all but one of the complexes.

    In one case a reseller has been battling since 2014 to fix a meter that was incorrectly programmed. The council by now owes the reseller R7-million – but instead of rectifying the situation, it cuts supply every now and then.

    • This article was originally published on Moneyweb and is used here with permission
    City Power Eskom top
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleRamaphosa tightens Covid rules but avoids hard lockdown
    Next Article Intel warns chip supply shortages could last years

    Related Posts

    Huge Group to acquire what was Virgin Mobile in South Africa

    6 July 2022

    TechCentral needs your help – 2022 reader survey now live

    6 July 2022

    Call for ‘energy emergency’ to end load shedding

    6 July 2022
    Add A Comment

    Comments are closed.

    Promoted

    Hot Ink certifies and diversifies to maintain competitive printing edge

    5 July 2022

    Increased flexibility with Dell Precision Mobile Workstations

    5 July 2022

    The 5 secrets of customer experience in the cloud era

    5 July 2022
    Opinion

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Has South Africa’s advertising industry lost its way?

    21 June 2022

    Rob Lith: What Icasa’s spectrum auction means for SA companies

    13 June 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.