Real Estate Investor Magazine South Africa September/ October 2019 | Page 33

of the purchased amount PLUS monthly meter management
fees, are common.
ACCESS AND TAMPERING
Pre-paid meters are often marketed as tamper proof, provided
that the end user is isolated from the supply. This is true where
the metering unit is installed in a locked, secured kiosk in
the road, whilst the CIU (Customer Interface Unit) is located
inside the residence. Whilst this is the preferred installation
methodology for the City's own pre-paid deployment, it is not
always practical. In some cases, the City is forced to install the
metering unit on the premises, providing the user with access
to the unit.
Let us assume that a typical “tamper-proof” meter is
installed, without two-way communications, receiving new
tariff information via PLC or the token only. Problem: How
would tampering be detected and communicated back to the
meter owner (the landlord/utility)? Typically via an indicator
on the screen but such would only be noticed from a physical
meter inspection. The meter would have the same indication
on the screen, whether it was a tamper triggered in error or
a real tamper due to the subsequent bypass. Upon tamper-
triggering, the unit may prevent the loading of credits or
simply shut off the supply. Now, if my meter disconnected my
supply, I would simply bypass the meter and tell the council to
fix their meter. Ultimately the City would have difficulty to hold
me accountable for stealing electricity.
As a landlord, a pre-paid system opens a completely new
Pandora’s Box. Property owners don’t necessarily have access
to outside, secured kiosks, forcing meters to be installed inside
the property. Tenants now have access to their meters, and the
bridging or the splitting of supply are easily done. Access to
the incoming supply wiring leads to tampering. This causes a
shortfall on the electricity bill that the landlord receives from
the scheme/estate as what is charged to the tenants via the pre-
paid system is less than what is charged by the utility provider.
This is the core reason, as a professional property investor, why
I choose to not use pre-paid electricity in my rental units.
The same happens with the City, just on a grander
scale. Without sufficient sub-meters to keep track of actual
consumption, a large portion is disappearing as “technical” or
“non-technical” losses. Despite this, the City is still profitable
as the power that "disappears" month-to-month is paid for
as a premium by the honest, making the burden on the loyal
citizens’ pockets even heavier. Did you know that on average
between 30% and 50% of all utilities bought by South African
municipalities is “lost” between the supplier and billing?
Any meter that doesn't support two-way communications,
such as the older STS and STS2 type Pre-Paid meters, is exposed
to this flaw. Since they have no way of communicating actual
consumption back to the City's Utility provider, the City cannot
determine actual losses between point A and point B. The City
of Johannesburg (and most others for that matter) at this stage
utilises a zero-balance review to reveal the thieves. Thus, they
investigate only meters where no purchases have been made.
However, consumers bridge out meters partially, or entirely
and buy tokens but never load them. The “clever” thieves are
thus getting away! Consuming R 2 000 in electricity and buying
R 100 in tokens seems like a good deal to me…
CREDIT CONTROL ACTION
The benefit of the lower-base charges that pre-paid meters offer,
falls away when deployed in complexes that are being measured
on a credit meter by council. If the pre-paid meters were billing at
the same rate as the pre-paid deployed by the City, there would be
an under-recovery on the services due to the lower pre-paid than
post-paid rate, unless the building/complex as a whole utilises
more than the breakeven point for that installation. In addition,
with pre-paid meters it would become illegal for a body corporate
to restrict or apply for disconnection of utilities at the courts where
arrears levies are concerned. The lack of utilities or inconvenience
of a tripping breaker could not be used to convince delinquent
owners to settle their arrears accounts legally. This is, with a current
culture of non-payment, probably the biggest deterring factor for
Body Corporates and Commercial Complexes.
In conclusion: replacing a
conventional meter with a
pre-paid or smart device
in order to simply NOT
visit the meter regularly is
downright irresponsible.
I hear someone ask: "What about smart meters?" Whilst
these smart meters can communicate both ways and can
operate in both credit and pre-paid modes, they are only as
good as those managing them. The City of Johannesburg
recently purchased a massive number of smart meters, but
without communications functionality and, retrospectively,
had to fit modems to these meters. Whilst capable of picking up
and reporting some tampers, they face the same vulnerability
as the pre-paid meters: if the customer has access to the supply
side the meter could be by-passed without the meter being
any the wiser (no pun intended).
A recent visit to Soweto revealed that 5 of the random first
10 meters visited were found to be bridged out. In conclusion:
replacing a conventional meter with a pre-paid or smart device
in order to simply NOT visit the meter regularly is downright
irresponsible. New technologies offer a false sense of security on the
African continent, where electricity in relation to average earnings,
is very expensive. These technologies may resolve reading mistakes
but will not prevent the theft of utilities and, even if implemented
properly, will not negate the need to visit them regularly.
As a landlord/community or municipality it is smarter to stay
with, and visit your conventional meter regularly.
RIAAN NAUDE, Johannesburg businessman
Riaan Naude is involved in a variety of industries
but by far his favourites are Property (specifically
residential Buy to Let) and Revenue Management
(specifically where it meets technology). Riaan is a
technical specialist who has been involved in the
Utility and Municipal Industry for over 18 years.
SA Real Estate Investor Magazine SEPTEMBER/OCTOBER 2019
31