RESOLUTION OF COMPLAINTS AND DISPUTES FOR THE 2016 CALENDAR YEAR (JANUARY DECEMBER 2016)

Transcription

1 RESOLUTION OF COMPLAINTS AND DISPUTES FOR THE 2016 CALENDAR YEAR (JANUARY DECEMBER 2016) 1

2 1. SUBJECT Resolution of Complaints and Disputes for the 2016 calendar year (01 January December 2016). 2. PURPOSE The purpose of the submission is to present a summary on the nature, type and number of customer complaints received by the Dispute Resolution Unit in the Electricity Licensing and Compliance Department for the 2016 calendar year. 3. BACKGROUND The Electricity Regulation Act, 2006 (Act No. 4 of 2006) ( the Act ) makes reference to investigation and resolution of complaints and disputes. For the purpose of this submission, the terms disputes and complaints will be used interchangeably. Disputes escalated to the National Energy Regulator (NERSA) range from tariffs; resale; billing; line deviations to other complex technical cases. 4. DISCUSSION 4.1. Municipalities owing Eskom One of the contributing factors to this trend is that most municipalities electricity revenue is not ring-fenced as well as the inability to collect revenue in their respective supply areas Smart metering challenges City Power and City of Tshwane started rolling out smart meters in their respective areas of supply. Challenges experienced by customers among others were: customers were neither consulted nor educated on how smart meters work. Some customer s electricity bills doubled with the installation of smart meters. Such cases are still under investigation, and the Dispute Resolution Unit has had a meeting with Total Utilities Management Services (TUMS), a contractor of City of Tshwane Municipality that manages smart 2

3 meters on behalf of Tshwane Municipality to explain why the installation of smart meters, how they work and complaints received on smart meters. Eskom is also in the process of rolling out smart meters in the Kyalami/ Midrand and Sandton areas Quality of Supply Some municipalities have been having frequent power outages, this problem emanates from lack of maintenance of the electricity networks. Municipalities that have been hit hard by this problem are King Sabata Dalindyebo Local Municipality (KSD), Ventersdorp Municipality and Tzaneen Municipality. These cases are currently being dealt with by the various Dispute Resolution Officers Public Protector referred complaints There has been a growing trend in complaints escalated to NERSA by the Public Protector, some of them are resulting from tempering of the meters. Customers have found comfort in the Public Protector over ruling NERSA s resolutions and that has somehow set a precedence of such complaints. So far the Public Protector has referred the following matters to NERSA: o Mr Shorn Khumalo vs Eskom Western Region - tempering o Ms Nomsa Kuthuka vs Eskom Western Region tempering o Mr P Modisenyane vs Eskom Central Region electrification o Mr A Tsutsubi vs Eskom Central Region electrification o Mr MJ Koets vs Eskom Eastern Region - tempering o MV Manuel vs Eskom Western Region tempering o Mr Mike Rossi vs Eskom Western Region excessive billing o Mr S Sipambo vs City of Cape Town tempering 4.5. Claims for damages With regards to claims for damages, there were six matters escalated to NERSA for mediation as customers lodged their complaints with their respective suppliers of electricity but were subsequently declined. Out of six claims for damages escalated to NERSA, only two were honoured by Eskom. Eskom paid a customer R for 5 cows electrocuted by electrical wires lying on the ground and died. These cows were for commercial purposes hence each cow was R In another case 3

4 in the North West province, the customer was compensated R per cow, for 4 cows which were also electrocuted by the electrical wires lying on the ground and died. 5. STATISTICAL ANALYSIS For the year 2016 the Energy Regulator received a total of 481 customer disputes. Of these disputes, 433 were successfully resolved with 48 disputes still pending. These figures translated to a success rate of 90%. Some of the 48 remaining customer disputes required considerable time to resolve due to complexity of the cases. The dispute resolution methods included conciliation and mediation in pursuit of resolving customer complaints. The table below shows the number of disputes received per province in Table 1: Number of disputes received per province in 2016 Province Number of disputes Breakdown of disputes received Eskom National % Gauteng % Kwa-Zulu/Natal Free State Western Cape Eastern Cape Mpumalanga Northern Cape North West Limpopo TOTAL % Gauteng province continues to lead with the highest number of complaints received. Table 2 below presents a breakdown in terms of disputes received per licensee. Table 2: Disputes received per licensee in 2016 Licensees Disputes Licensees Disputes 1. Eskom Naledi 1 2. City of Tshwane Lesedi 1 3. City Power Lukhanji 1 4. Ekurhuleni Maluti a Phofung 1 4

5 5. ethekwini Matjhabeng 3 6. Cape Town Mookgopong 1 7. Centlec Kamiesburg 1 8. Buffalo City Mangaung 1 9. Msunduzi Nketoana Mogale City Randfontein Kwa Dukuza Overstrand Mossel Bay Emalahleni MP Laingsburg Rustenburg Thaba Chweu Ba-Phalaborwa Bela-Bela Mbombela Cederberg Maluti A- Phofung Delmas umtshezi Drakenstein Knysna emfuleni Kannaland emthanjeni Mbizana endumeni Metsimaholo Ga-Segonyana Midvaal King Sabatha Dalindyebo Khara Hais Greater Kokstad Great Kei 1 TOTAL Issue/s The types and nature of disputes received by NERSA differ tremendously, as indicated in Table 3 below. 5

6 Table 3: Dispute categorisation Dispute Category Number Account complaints including: 164 Billing: - Fixed charges - Over-billing - Under-billing - Back-dated billing - Estimated billing - Basic charge - Increase on electricity deposits - Early implementation of an increased tariff - Administration fees - Double charging of service fees Traders/Resellers 69 Electrification 46 Metering and Prepaid meters 18 Quality of supply: 35 - Power outages - Voltage dips Quality of service: 8 - Estimations Claim for damages 6 Cable Theft 5 Cable Removal 6 Illegal connections 17 Meter conversions 3 Disconnections 20 Tariffs 84 Total 481 In comparison to the type of complaints received during 2014 and 2015, account complaints continue to be the highest Tariff-related complaints o Incorrect or non-implementation of Inclining Block Tariffs (IBTs) by some licensees continues. These complaints are handled and also referred to the Education Team to conduct Education Seminars in these communities. 6

7 5.1.2 Municipal tariffs vs Eskom tariffs (Commercial & Industrial customers) o Commercial and Industrial customers are comparing municipal and Eskom tariffs and have identified that the municipal tariffs are much higher than Eskom tariffs, hence industrial customers continue to seek migration to Eskom supply areas Billing o Customers bills are estimated for longer periods than the three months stipulated in the NRS047 Quality of Service Standard. o Customers do not receive electricity bills regularly from licensees. o Erroneous billing systems, from City Power in particular, continued to reduce drastically in this financial year due to a monthly complaints committee forum between NERSA and City Power. This forum was established by the NERSA Dispute Resolution Team and City Power Disconnections o Customers are disconnected without the prior notification of 14 days before cut-off is effected. o There are frequent power interruptions due to theft of electricity. o Customers are disconnected due to non-payment of other services, i.e. water, rates and taxes and levies Electrification o Customers apply for electricity, pay a deposit and wait for long periods before they are connected especially Eskom customers. o Inconsistent quotations are received by customers when applying for electrification. o Eskom including exorbitant deposits, customers should be educated on how deposits are determined Metering o o Faulty meters are not replaced. Estimations for longer than three months continue for 7

8 o Domestic customers. There is biasness in reading customers meters, especially by Resellers meter readers Quality of supply o o o Planned and unplanned power interruptions. Quality of supply power interruptions. Any other interruption that may be caused by power system Faults or transient instability Traders/Resellers of electricity o Trading in the electricity industry is growing at a tremendous rate in the country, the following are trends among others identified in the ESI: o Resellers/Traders of electricity continue to charge unapproved tariffs. Most Resellers/Traders increased their deposit vendor fees from 5% to 10%. The higher the customer buys electricity, the higher the charge fee. For example, if a customer purchases electricity for R at a vendor i.e. Checkers, Woolworths, the Reseller/Trader will deduct 10% which is R o Resellers/Traders charge exactly the same charges as licensees even though costs incurred are much lower compared to licensees costs, i.e. basic charge. Most Resellers charge the exact fixed charge as approved for the licensee, they do not pro rate it. For example, the Reseller is charged one fixed charge (i.e. basic charge) of R at the bulk supply point. The Reseller will charge R each unit in the residential or commercial complex, this practice results in Resellers of electricity over recovering. o Some Resellers/Traders compel their customers to purchase prepaid tokens at specific institutions which are not convenient to customers i.e. four major banks in the country. o Customers are subjected to unpleasant processes when purchasing electricity tokens such as waiting for 24 hours to receive electricity tokens and being forced to have cell phones with air time to request the electricity token after 24 hours. o Immediate disconnection of supply without prior notification/disconnection notices. 8

9 o Resellers meter readers are suspected to be biased when reading customer s meters as the outcome is usually in favour of the Reseller Others o Customer education remains an imperative role that NERSA should continue to play in educating customers on electricity issues, which will result in a reduced number of complaints and enquiries received by the Dispute Resolution Unit. o Language barrier some customers prefer to use Afrikaans as a medium of communication regardless of their ability to communicate in English. Such complaints were referred to Yvette van Zyl to assist with the translation of such complaints momentarily as she s not a translator but an editor Problem Statement From 2014 to 2015 there has been an increase of 23 disputes from 458 to 481. Most disputes received continue to be complex in nature and took more time to be resolved compelling the Team to convene and chair mediation meetings and identify trends in the disputes received so to come up with more efficient ways of handling them. Table 4: Number of disputes received during calendar years CHALLENGES The following were identified as challenges in the Dispute Resolution Unit: The issue of Resellers of electricity currently not regulated remains a challenge in the ESI even though progress was made through the formulation of the Reseller s guidelines. The guidelines have loopholes which are currently exploited by some Resellers of electricity. The current punitive measures are not implementable by the Regulator. 9

10 7. FINANCIAL IMPLICATIONS There were financial costs incurred related to travelling expenses such as flights, accommodation, car hire and shuttles to resolve customer complaints which warranted meetings outside the office in all nine provinces. 8. ECONOMIC IMPLICATIONS There are no economic implications. 9. LEGAL IMPLICATIONS Non-compliance and non-adherence to the Electricity Regulation Act No. 4 of 2006 by licensees is a direct contravention of the Act. 10. REGULATORY IMPLICATIONS Non-compliance of licensees leads to ineffective regulation of the Electricity Supply Industry (ESI). 11. ORGANISATIONAL IMPLICATIONS Non-compliance of the licensees affects the image of the organisation negatively and the customer interests are compromised as a result. 12. RECOMMENDATIONS The Energy Regulator is requested to note the reporting on resolution of disputes for 2016 calendar year 1 January 2016 to 31 December