BCM residents experience 80/20 system in new credit control policy

Beginning on March 1, 2023, all accounts with overdue payments of over 30 days will be subject to a partial restriction on the purchase of electricity by the Buffalo City Metropolitan Municipality.

This is a Credit Control Policy in accordance with Section 96(b) of the Local Government: Municipal Systems Act, No. 32 of 2000.

The municipality is allowed to enforce a limited restriction on the purchase of electricity under the parameters of the policy, with 80% of the amount tendered going toward the customer’s arrears account.

This does not apply if the account is paid in whole by the due date indicated on the monthly municipal statement or earlier, and it does not apply to customers who are classified as being indigent.

Consequently, the municipality will only implement a partial 80/20 blocking when a person purchases electricity after being past due for more than 30 days.

The municipality clarified this on social media by saying: “An example of the 80/20 system means if a consumer is in arrears and they purchase electricity for a R100, they will be receiving electricity equivalent to R20, and the Metro will retain the rest to service the debt. The advantage of this is that consumers will no longer be blocked from purchasing electricity when they are within a 60 days debt.”

The municipality did state that for those whose accounts are over 120 days overdue, the full blockage on the pole will still be applied.

The National Energy Regulator of South Africa (Nersa), the country’s energy regulator, approved an increase in electricity rates of 18.65% for 2023 and 12.74% for the following year at the beginning of the year.

Nersa claims that challenging economic conditions, including as high interest rates, slow growth, high unemployment, and load shedding, were the backdrop against which the decision was made.

On July 1, 2023, these electricity rates are anticipated to take effect. Residents in Buffalo City have long complained about the price of their electricity bills, while others have griped about individual electricity units.

A resident of BCM, Nontombi Thunywashe says she inherited her deceased mother’s indigent status-designated account. She says that in 2020, after receiving a communication from BCM, she went to inquire and raised her concern, explaining that the sole source of income in her family was a foster grant for her younger sister. She says that after telling them she could only afford R100 a month, they told her she was unable to do so since she was already receiving a subsidy.

“Fast forward to February 2023, when I bought electricity and discovered that for R50, I only received electricity equivalent to R20. “I still went to the offices to inquire, only to be told that I had not been charged water since 2020,” Thunywashe explained her situation.

She continued by saying that the offices’ indigent department reviewed her billing history and discovered that she had received double charges for refuse. She says an email was sent to resolve the problem with her account, but it has not been fixed as of yet.

Samkelo Ngwenya, a spokesperson for BCM, was contacted for additional comment; however, he did not respond in time for the story to go to print.

The credit control policy states the following:

“(a) The municipality will allow a partial block purchase of electricity of 80/20 based on economic conditions prevailing at the time for the following reasons (below). The approval for the implementation of the partial block can be done by the Chief Financial Officer (CFO) in consultation with the Accounting Officer:

“(i) When a customer moved into a property and failed to apply for services from the municipality and failed to pay the required security deposit.

“(ii) When the disconnection of electricity, blocked from the purchase of electricity and the restriction of water flow to the property did not have the desired effect to persuade the customer to pay the arrears debt.”

To avoid any restriction on the purchase of electricity, customers who are in arrears are urged to settle the outstanding amount and visit their nearest office.