Real Estate Investor Magazine South Africa July/August 2019 | Page 21

“Unfortunately, the exact details of how any
particular electricity bill is calculated can be so complex
it’s difficult for even experts to understand,” says Franze.
Franze explains the role of Citiq Prepaid.
“At Citiq Prepaid we do some very complex
calculations to make sure we’re charging every user
the right tariff, no matter where they are or when or
how much electricity they are charged. Our goal is to
make things fair and transparent for everyone. We help
landlords collect what they owe to the municipality or
Eskom, not to make a profit on the selling of electricity,”
he says.
“In the long term, the real solution is for Eskom,
Municipalities and the National Energy Regulator to
design simpler consumer tariffs. But in the meantime,
there are three basic pieces of information that can help
consumers to make sense of their electricity bills,” adds
Franze.
Depending on where you live, consumers charges will
vary for electricity and Franze provides insight into why
this occurs.
“If you get your power directly from Eskom, which is
the case in many rural areas and in Soweto, for example,
you will be charged according to a different system than
if you get your electricity from a municipality. And each
municipality has its own system as well. For example,
in Cape Town people with homes valued at over R1-
million pay a basic home user charge that covers the
cost of keeping them connected, no matter how much
power they use; some municipalities like Ekurhuleni
have different tariff systems depending on how much a
household uses in a month; and different municipalities
charge different rates for a unit of electricity. So it’s
important to check what your own municipal system is.”
Users must become familiar with the incline block
tariff (IBT) system in order to understand what they are
being charged for.
“Basically, this means that the more electricity you
buy in a month, the more you pay. In the case of prepaid
customers, it has nothing to do with how much you
actually use — the cost is purely based on how much
you buy. This means that electricity is one of the rare
cases where it’s really not a good idea to buy in bulk.
Rather buy from week to week, or buy just enough at
the beginning of each month to keep you going. It’s
cheaper to top up with a few units at the end of each
month than to buy enough to last you for two months,”
explains Franze
Consumers should understand exactly what they’re
getting when they buy a unit of electricity. Franze
provides examples of how certain appliances use
electricity more efficiently, reducing power costs for
consumers. “The terms can get confusing, but when you
break it down it’s actually quite simple,” says Franze.
“The amount of power any appliance uses, also called
its power rating, is measured in Watts (W) and this is
always marked on the packaging or somewhere on the
appliance. So an energy-saving lightbulb might use
20W and an iron would be around 1,000W or 1 kiloWatt
(kW), for example. A unit of energy, which is measured
in kiloWatt hours (kWh), is just the amount you need to
run a 1kW appliance like an iron for one hour. So your
unit will last a long time if you’re using appliances with
a low power rating, or get used up really fast if you’re
using more power-hungry appliances. A good general
rule is that the more heat an appliance generates, the
more power it uses,” he adds.
Franze explains that there are two ways to save
electricity. “The first thing to do is choose appliances
with a lower power rating. For example, if you leave a
100W traditional light bulb on for a whole week, which
is 168 hours, you’ll use nearly 17 units of electricity. If
a unit costs 150c, then it works out to about R25.50
to keep that one light bulb burning for a week. If you
change to a 4W LED energy saver bulb, you’ll use just
over 0.6 units in the same week, and spend about R1c.
A saving of R24!.”
The second way to save is to use each appliance for
fewer hours. “Fridges, freezers and alarm systems are
the only things in most houses that need to be on all
the time,” says Franze. “With everything else, the less you
use the more you’ll save. Switching things like TVs and
DVD players off at the wall when you’re not using them
is one of the easiest ways to save,” he says
Providing some energy saving tips, Franze explains
that slight changes to how we use energy can amount
to massive energy cost savings each month.
“Once you’ve switched off appliances that stay in
standby mode, look at the things which use most power:
stoves, ovens, geysers, kettles, irons and heaters. For
example, even the most efficient wall panel heater uses
400W an hour, which is nearly R2,50 a day if you use it
for four hours. A two-bar infrared heater will cost twice
as much. Closing the curtains to keep the heat in, and
putting on a jersey instead of turning on the heater,
could potentially save hundreds of rands a year,” says
Franze
He explains that consumers should find ways to use
overs and stoves more efficiently. “A wonder box for
cooking grains, rice, potatoes, beans and other dishes
that need slow cooking saves on electricity. There are
many other ways to save electricity, and we should all
start becoming more familiar with them. For our wallets
and for the planet, we need to start using energy more
efficiently,” said Franze.
MICHAEL FRANZE, Citiq Prepaid Managing Director , Citiq
Prepaid is a national supplier of pre-paid electrical and water
metering vending systems.
SA Real Estate Investor Magazine JULY/AUGUST 2019
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