The City of Tshwane’s controversial electricity metering contractor TUMS has admitted to inaccurately billing some of the 13 000 customers it supplied with electricity since October 2013.
Total Utility Management Services (TUMS) is the implementation vehicle of PEU Capital Partners. The contract between Tshwane and PEU has been declared unconstitutional and invalid by the High Court in Pretoria last month due to procurement irregularities.
The orders of invalidity were suspended pending the determination of a just and equitable remedy. The parties have recently filed papers with their proposals for such a remedy.
TUMS states in court papers that only a handful of cases of inaccurate billing occurred, thereby contradicting statements in the city’s annual report that about 600 intensive users were affected.
Moneyweb reported in February that then acting city manager Lindiwe Kwele alleged in the city’s annual report that the meters were deliberately set to under-read. She blamed this for the 56% increase in the city’s electricity losses in the previous financial year, valued at R858 million.
TUMS’ admission comes as energy regulator Nersa is set to mediate in a dispute between the City of Tshwane and the Agricultural Research Council (ARC), with regard to TUMS’ under-billing of R30 million at the Onderstepoort Veterinary Institute in the north of Tshwane.
The ARC has indicated to Moneyweb that it is prepared to go to court if the mediation is unsuccessful.
The city mentions another instance of R9 million under-recovery in the same circumstances in its court papers.
According to documentation on the matter that Moneyweb has seen, the City of Tshwane slammed the ARC with a bill of R30 million in February this year. This related to the prepaid electricity account at Onderstepoort for the period September 1 2014 – November 28 2016.
The city gave it only 14 days to cough up and eventually the ARC had to obtain an interdict to keep the lights on at Onderstepoort.
The ARC stated that its electricity cost had dropped substantially after it switched to the TUMS prepaid system. The Council brought it to TUMS’ attention early in 2015, but TUMS only attended to it late in 2016.
On November 28 2016 the city informed the ARC that the scaling factor applicable to the Onderstepoort account had been adjusted from 40 to 4 000.
In correspondence during January and February this year, the city and TUMS explained to the ARC that the Current Transformer (CT) and Voltage Transformer (VT) ratios related to Onderstepoort were incorrect, which resulted in the wrong scaling factor.
These ratios are crucial to converting the reading of electricity usage into billing – using an incorrect ratio could result in material billing variances.
The ARC argues that the R30 million adjustment is unlawful and that the city infringes on its right to just administrative action.
TUMS indicated to the ARC and in its recent court papers that the City of Tshwane provided the CT and VT ratios to it and TUMS had to apply it when installing the meters.
Moneyweb put this independently to two electricity experts familiar with the system. They both question TUMS’ contention, saying any qualified installer should know what ratios to use.
TUMS further states in its court document that there were only a handful of incidents of such under-billing “but in almost all instances the revenue has either been collected or is in the process of being collected”.
TUMS does not expand on it statement that the incorrect ratios could have led to over-billing and the city is quiet on the matter.
Former DA councillor Lex Middelberg, who played a crucial role in uncovering the details of the former ANC-led council’s unlawful contract with PEU/TUMS but has since left the DA, has however told Moneyweb that many large power users have been complaining about a significant increase in their electricity cost since they have been switched to the TUMS system.
Middelberg says some of these users have already formed a consortium to explore the possibility of a class action to recover what they consider to be unlawful electricity charges.
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