Don’t fall victim to assumptions…

Madam – The Newcastle Advertiser of 10 October 2014 featured prominently on municipal bills, financing of the Municipal offices as well as what the Mayor’s municipal bills are and in these aspects the following is relevant and should be brought to the public’s attention.

Prepaid Electricity: In all fairness to the Municipality they will not deliberately over-read and over-charge the public for their consumption. Should prepaid meters be introduced, the Municipality will still be the controlling body who will determine tariffs and anyone who thinks that electricity usage will become cheaper is in for a surprise!

I am not saying that this system is wrong, but one must also bear in mind that, as the Mayor had explained in the previous week’s newspaper, we pay in arrears and let’s for argument’s sake say that a prepaid system is to be introduced from 1 July 2015, it will mean that at the beginning of July 2015 the consumer will have to pay for what they are to use for the month of July as well as for the consumption that they had used for the month of May 2015 and then again at the beginning of August the same will apply, this time paying for June’s consumption, and only after this will things normalise.

This in effect means that for two months running the consumer will have to cough up double the normal amount. It is true that using the present system the Municipality has a hold on all of us whereby, should we not pay our accounts the electricity is immediately cut.

But here again, in all fairness to the Municipality they must have a system in place to ensure payment and we can be rest assured that should a prepaid system be introduced the Municipality will find a way to ensure payments.

In other words to make sure it hurts more not to pay than it does to pay. It is also said that prepaid meters will do away with the present block system but if this is true the overall tariff will be increased to such an extent purely for the Municipality to ensure that revenue from this source is not compromised. It must be remembered that the Municipality buys electricity from Eskom and then re-sells it to the consumer, as it also does with water.

This is a major source of income to the Municipality. Smart Meters: Apparently this is the way to go, but this is also a relatively new system and according to a number of sources this system has not been yet proved. This Municipality has already called for tenders twice and on each occasion was cancelled and with the last one serious allegations of misconduct were made.

On page 3 of the Advertiser the Mayor talks about rolling out the project for prepaid meters, I think that he is actually talking about smart meters and from what could be gathered smart meters do not include a prepaid facility. The way that these meters work is that they measure the consumption on what is called “time of use” system.

Electricity usage peaks in the evenings and early mornings but drops significantly during the day when demand for electricity is at it’s lowest. Therefore electricity consumed during the peak period will be charged at a much higher tariff than used during the low period.

The advantage of such a system is said to be that the consumer can save on their electricity bill by planning their electricity usage correctly eg. by cooking/bathing etc during the day and not in the evenings at peak times. These smart meters are however very expensive to purchase and operate as information from these meters has to be constantly transmitted to a control room from where billing will be done.

New Offices: It is unbelievable that the Mayor’s statement that none of the revenue from municipal bills is going towards the funding of the new office block. Who is then paying for this, and why are they requesting these massive loans? It can only be the consumer who will have to repay these loans.

As for the Mayor’s statement that he will not be moving to the new building and will be staying where he is! How humble!

The fact is that the office he presently occupies formed part of the first phase of the new municipal building and his luxurious office/reception/boardroom, not to mention all the furniture that goes with it was one of the first to occupy the new facilities.

Lastly I have no doubt that the Mayor would be billed any differently to anyone else because of his position but the mere admission: “I make no secret of the fact that I enjoy my heaters. On a cold day, I like to come home to a warm house. That is why I do not mind paying for something I really use,” implies that his municipal bill is insignificant to him, and when considering his salary as well as his official and unofficial perks that he enjoys it is understandable that his municipal bill is in fact insignificant!

On the other hand, many of us would also like to come home to a warm house but only in very exceptional circumstances can we consider using even one heater. There are many people who earn less than what he “pays” for electricity and unlike in his case, their electricity bill has a major influence on their budgets and we are therefore not amused when we have to pay more than necessary when to certain people this is of no consequence.

FULLY CHARGED.

Comment from Mayor, Afzul Rehman:

The writer seems to get things right at the beginning of the letter and then completely wrong later on. It is correct about tarrifs and prepaid meters. However we are told that smart meters do have the choice to be switched to prepaid if the consumer requires it.

Electricity is NOT a major source of income to the municipality, the cost to provide it, as well as maintain the networks, and pay staff that are electricity related almost consumes all the “profit” made for this service. If the writer thinks my statements are unbelievable, they should make time to look at our budget. It is an open document, made available to the public.

Our revenue comes largely from rates and government grants, most other services have costs attached to them. Of course the ratepayer is a major funder, but not through the electricity portion of the bill. Or can the writer not differentiate between a utilities bill and an electricity bill?

The issue of the offices was a response to a comment that I will be moving to the penthouse suite, my understanding is that will be the very top of the building, to which I responded I will not. There was no act at humility there.

Yes, my offices were refurbished in 2010, and I will not call a facelift a new building, but councillors have sacrificed a new council chamber and offices because of the need for staff offices. You may not think this is worthy of martyrdom, but just look at other municipalities and see what was built first. You have no idea how good you have it here.

My bill was requested by the media, it was not my idea to allow my private life to be spoken about in the press. I prefer to keep my professional life separate. However I agreed to submit it in an act of transparency, what you make of it from there has no bearing on me.

My comment about heaters is to illustrate a simple user pays principle. For the record, I earn even less then a third tier director in the municipality and you will be surprised at the percentage the utility bill is on my nett salary. You are assuming how insignificant the bill is to me, and we all know what assumptions do to us…