Page 47 - Energize October 2022

VIEWS AND OPINION

reseller on-sells it to end-use customers (who have individual meters), and in so doing the Misunderstanding of whether the
electricity reseller is allowed to make a profit. This buying and selling of electricity (inclusive reseller is the owner of, or (where
of the profit margin) by an electricity reseller and the associated conditions must be the owner is not the account holder)
formalised in the electricity supply/service agreement between the electricity reseller and the account holder in respect of a
the said licensed electricity distributor (this principle is not generally applied: in the absence property such as a block of flats. Is
of a Service Level Agreement (SLA), terms and conditions of which have been ratified by the reseller the body corporate or
NERSA, a reseller remains exposed to not making profit. The provisions of section 15(1) of homeowners’ association – or the
the ERA do not apply to resellers). account holder (in cases where the
account is not in the name of the
There is no transparency of transactions associated with electricity reselling. body corporate or homeowner’s
Electricity resellers in terms of the Act must be transparent in their formalised association, but rather the account
relationship with the said licensed distributor with respect to all matters relating to holder is the developer or the
electricity reselling. Arguably the licensed distributor can through the electricity supply/ managing agent)? This is a very
service agreement that is concluded between the electricity reseller and the licensed important question because often
distributor, enforce: owners have agents managing their
• Transparency between the electricity reseller and the licensed distributor and properties for them. This raises the
• Transparency between the electricity reseller and the end-use customer issues of (amongst others) who must
• The licensed distributor must ensure that the said regulated tariff that the end-use be registered, who must give notice,
customer ought to be charged and paying, is made transparent to both the electricity who is responsible for dealing with
reseller and the end-use customer complaints, who has the power to
• A dispute resolution mechanism should also be made clear and transparent to both the terminate supply, and from whom
electricity reseller and the enduse customer. In this respect if the end-use customer has invoices must be issued.
an electricity issue e.g., he/she is unhappy with the tariff he/she is being charged by the Resellers do not buy electricity and
electricity reseller, then the end-use customer can approach the electricity reseller in on-sell to other parties. They sell
the first instance. If the licensed distributor if the electricity reseller does not respond electricity on behalf of a licensed
or if the end-user is unhappy with the electricity reseller’s response, the end-user has distributor, whether Eskom or a
recourse to NERSA. municipality. It does not matter who
the reseller is, whether the owner of
An electricity reseller can and is allowed to charge an end-use customer more than the a block of flats or an agent appointed
regulated tariff that a licensed distributor (e.g., a municipality or Eskom) would have by the owners or a body corporate.
charged the said end user if a reseller was not involved in the process. That does not change the legal status
This is not true. An electricity reseller is not allowed to charge an end-use customer any tariff in respect of the sale of electricity
that is different to the one that a licensed distributor would have charged the end-use customer. [Source: Schindler’s Attorneys].

The process of electricity resale or electricity reselling is not regulated. Can a reseller charge each end-user
This is not true because the process of electricity reselling is regulated by the Act. (i.e., each sectional title unit or flat)
the standard network and/or service
An end-use customer can be charged a so-called resellers service fee, operational recovery fee charged to the reseller? Or must
fee, etc. it divide this charge up amongst all of
Electricity resellers cannot charge or claim any fees (whether service, operations, etc the units or flats?
related) from an end-use customer. As indicated, the end-use customer cannot be charged If someone had bought bulk electricity
any tariff besides the said regulated tariff that the licensed distributor would have charged. from a licensed distributor and was
further distributing; they would
Electricity resellers can claim a cost of operations fee from end-use customers. require a separate distribution licence
Electricity resellers cannot claim any fees from end-use customers. to on-sell electricity to consumers.
If, however, they are reselling on the
Misunderstanding of the status of tenant(s), subtenants, etc., in relation to a licensed back of another distributor’s licence,
distributor’s retail customer. they cannot charge users a tariff that
All tenants, sub tenants, etc to such a retail customer supplied by a licensed distributor is higher than that approved for that
are still considered as end-use customers to/of the licensed distributor. Hence it is the distributor as prescribed by Section
prerogative of the retail customer to inform the licensed distributor of the existence (and 15(2) of ERA [Source: Schindler’s
the details) of such tenants, subtenants, etc. Attorneys].
The latter requirement was made clear in the Leon Joseph, et al., vs. CoJ/City Power, et On 20 February 2015, the High
al., Constitutional Court of South Africa, judgement, Case CCT 43/09 [2009] ZACC 30 court Court, Gauteng Local Division,
case. Johannesburg, ruled in a case

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