What is Prepaid and Sub-metering

How the prepaid electricity system works:

The prepaid electricity system is similar to using a prepaid mobile phone: you purchase airtime from a vendor and you receive a unique code (normally consisting of specially generated digits). When this code is entered into the mobile phone, you basically load an amount of talk-time on a specific mobile network.

Purchasing prepaid electricity works in much the same way, as you purchase a unique code which is entered into the electricity meter, using a special dial to load a certain amount of electricity units. These electricity units loaded on the electricity meter is what you make use of, and replenish by purchasing another unique code when needed. In essence, the prepaid system allows you to pay for electricity usage before actually making use of the electricity.

Why choose prepaid electricity?
Ultimately the prepaid electricity system saves costs to property investors, body corporates, landlords and the like. In turn, the prepaid electricity system is actually beneficial for the consumers themselves as well. Prepaid customers pose no credit risk. Deposits are not required, which also eliminates the need to generate interest on deposits. There is never an overdue balance. Invoices and collections are therefore unnecessary.

On the other hand, traditionally billed electricity systems have to invoice customers at the end of a billing period. Unpaid invoices become a burden to property investors, body corporates and landlords as they have to collect the overdue amount themselves. If the collection effort is unsuccessful, the customer’s electricity is eventually disconnected and the unpaid revenue is written off as bad debt.

What is sub-metering of electricity?

Sub-metering is the general metering of a complex or property where there is one main municipal meter, also known as a bulk meter, and thereafter other meters called “sub-meters”.

Sub-meters are installed after the primary municipal meter, whether it is a bulk meter or not.

What is a prepaid electricity sub-meter?
In cases where there is more than one building on a piece of land, or in the instance of sectional title complexes where there is only one municipal account, electricity sub-meters are used.

It is common practice for the developer of the complex to bring services to the ERF in bulk which enables the future body corporate to have a single municipal account. This is called a bulk meter.

Electricity sub-meters are installed secondary to the bulk meter, and is usually the responsibility of the developer. This is especially common in sectional title schemes. More often than not these are post paid. An alternative to the post paid method is the prepaid electricity system. The difference between these two systems is basically that the post paid meter requires a meter reading company to read the meters monthly, whereas the prepaid system requires no services to read meters as the electricity units are purchased on a prepaid basis and utilized thereafter.

There are various different prepaid meters which includes the AMI/AMR electricity sub-meters, with the most common prepaid electricity sub-meters being STS sub-meters. STS sub-meters work with tokens. AMI/AMR electricity sub-meters are more expensive where the cost of devices and the installation is concerned.

Privately Owned, Privately Managed, Prepaid Metering Solution

Prepaid Meters and Metering for New Property Developments

New property development projects present an excellent opportunity for installation of sub-prepaid meters and Revenue Management. Specification of sub-prepaid meters and revenue management solutions in new developments is highly desirable for developers as this level of planning and consideration has significant benefit to the future operation of the development. This benefit translates into a more marketable and desirable product for would be home buyers and property investors.

Once operational commercial and residential property developments faced the same financial management challenges when it comes to revenues collection management. Whether the need is for Prepaid Meters and Metering for Commercial or Prepaid Meters for Residential schemes, specification of prepaid meters and prepaid metering systems enables developers to reduce their costs in provision for the supply of utilities to the development. By application for bulk-metering services developers can significantly reduce costs associated with individual section metering.

Furthermore, the installation of a prepaid meter in each section ensures an improved level of financial management once the scheme is in operation. With this in mind, the value of properties within the scheme are more attractive to private and investor buyers who realize that a significant portion of the risk associated with the revenues collection management of the scheme has been obviated.

Specification of our prepaid meters and metering solutions also obviates the costs associated with meter reading charges that are customary in such schemes. This results in reduced costs to the scheme and hence the individual section owners. Once again, the combination of prudent financial management from the perspective of revenues collection management for utilities combined with reduced costs makes the scheme more attractive from the immediate perspective to any buyer, addes value to the product and improves marketability of the scheme.

Prepaid Meters and Metering for Body Corporate

Our Prepaid Meters and Management Offering for Body Corporate:

  1. Prepaid Meter Management - no hassles with meters management we do everything.
  2. No more per quota billing - everyone pays for what they use.

Many residential and commercial properties are owned in sections or areas by multiple owners, each owner owning one or more sections with the dwelling complex or building structure. In such arrangements there is usually a body corporate that is comprised of a number of owners. The role of the body corporate is to provide for governance of the scheme and taking care of various environmental and financial issues surrounding the operation.

In such environments it is common for the property to be supplied utilities on bulk-basis. Typically a single meter system is employed to calculate the overall consumption of all the sections and the common property area of the complex or building structure. Following this there may or may not be additional sub meters.

In the case where no sub-meters are installed, apportionment of the utility bill is typically calculated using the "participation quota".  This method attempts to determine fair apportionment by means of calculating ratios, either by number of persons or squared meter area. As expected, because of differences in peoples utilization habits, this method is rarely accurate and is fraught with problems and subject to frequent dispute and complaints from owners within the scheme.

In the case where sub-meters have been installed the situation is better as the meter for each section can be measured and therefore accurately billed. The sum of all the meter readings from the sections can then be subtracted from the bulk meter reading to determine the amount of electricity consumed in the common property areas. This can then, once again, be apportioned by means of the "participation quota" method to each sections utility bill.

While the situation where sub-meters are used is an improvement on the case where there are none, both situations are not perfect as payment for the utilities charged still needs to be collected once billed.

As is often the case is such scheme, there are people with varying financial means and circumstances. The result is that revenue collection management for the scheme is a task that requires constant attention, sending of reminders, calculation of late payment charges and debt collection. In the interim the body corporate or appointed management agent is still required to settle the utility billed it received on the bulk-meter account.

The amount of utility consumed in such situations is generally significant and therefore carries with significant liabilities. Without the aid of a prepaid metering solution, the financial situation of the body corporate may fluctuate significantly, resulting in contraction of the body corporate cash flow. Since utility bills must be settled in order to avoid discontinuation of supply, body corporate must often divert funds for service or maintenance in order to balance shortfalls.

Prolonged, this can lead to further problems such as general degradation of the complex or building with subsequent negative impact on health and safety and general up-keep or improvement.

Our prepaid meters and prepaid managing solution is the ideal solution for utilities revenues collection management in body corporate environments. Installed as sub-meter devices at the mains distribution board located within each dwelling area or section, our prepaid meters can be used to meter and govern the utility supply regardless of whether sub-meters are already installed or not.

Once installed our prepaid metering system ensures that all owners or their tenants are required to prepay for utility before being supplied. The result is an immediate improvement in the cash flow of the body corporate. Furthermore, installation of our prepaid meters obviates the need for sufficient meter reading services and the cost associated with the service.

In addition to these benefits, the problem of paying for utility consumption on common property areas of the scheme is also resolved. This is because such schemes are typically metered by way of a bulk meter at which the cost the supply is discounted by the supplier of the utility. In order to cover the cost of utilities consumed in common property, each of the prepaid meters installed in the section of the scheme is set to charge for utility at the regular or standard rate for that utility in the area. This is price is not discounted, as a result the difference between the revenue collected from the sections is sufficient to cover the common property. The overall amount collected from the sections, charged at standard rate, is typically greater than the amount billed at the bulk-meter. In most cases this results in a slight profit for the body corporate which can be allocated toward upkeep and maintenance of items such as light bulbs, switch replacements, etc.

Prepaid meters and prepaid managing solutions usually solve many problems for body corporate including cash flow, which is always highly important for all body corporate.

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