Utility costs continue to rise, in some parts, due to the increasing scarcity of our natural resources. In late 2022, the world population reached 8 billion people. It is estimated that should the world continue its current population growth, the world’s natural resources will be unable to accommodate the growing population.
Capetonians are no strangers to the struggles of limited resources. In 2017, the city was on the brink of experiencing ‘Day Zero’. The City of Cape Town embarked on an aggressive water conservation campaign. Since then, the city has implemented stricter by-laws that police the use of resources such as water and electricity. The management of utilities can be a large task, and so many property owners employ the services of utility management companies to oversee this. In South Africa, the industry has become a monopoly. This has left many renters covering costs that they have not incurred, being overcharged for utilities they have not used, and unable to get answers from the utility management company.
As a utility management company, InPower is available to assist with the auditing of meter readings in an effort to save our customers money.
Economies of Scale
Utility management companies manage the day-to-day usage of basic services, mainly water and electricity. In South Africa, these companies manage multiple large properties, including shopping malls, skyscrapers, and multi-purpose buildings. These complexes and buildings house thousands of units. As a result, these companies’ business model is not ideal. Each managed unit is billed in the same way for utility use, often with the addition of unexplained administrative fees. For example, a one-bedroom apartment in a secure complex and a small industrial unit has little to no distinction.
Major Utility companies stand to make the most from driving up utility costs, by overcharging tenants and creating big shortfalls for Property owners and managers to recover. It’s hardly surprising that popular complaint message boards are overflowing with examples of how utility management businesses seem to operate outside of the reach of regulation given their expansive approach to monthly billing.
Big company, bigger staff, biggest overheads, bigger utility costs
By nature, larger utility companies are capitalistic. And by default, their reputation as a ‘leading’ utility management company makes them ideally placed to win over property owners and managers, promising to oversee the installation and management of meter readings and usage. In the case of electricity usage, Eskom’s continual tariff increases are an advantage to these companies. These increases provide them with the ability to take on extra undetectable percentages to their readings and service fees purposely driving up your utility costs. When questioned, these concealed fees are justified as “mistakes.” Due to the large number of managed properties and units, discrepancies are frequent. In some of these instances, tenants are still expected to make the payment regardless. If the tenant can’t afford the inflated utility costs then it is left to the property owner to cover the shortfall. In sectional title schemes, this has become normal.
Despite property owners and managers delegating day-to-day utility management, they are still responsible for costs and management. Tenants and Landlords alike, have no other means of expressing their concerns and frustrations other than to the management company. Poor service quality, incorrect billing, and non-responsive customer service are the most frequent complaints.
Taking control of your utility costs
The cost of basic services like electricity and water should not cause headaches. However, with the current cost of living, it is another headache. A growing interest rate, a weakened economy, and the recent addition of South Africa to the global greylist, should mean that transparency in utility costs is not too much to ask for. Tenants may be condemning themselves to an ongoing cycle of high utility charges if utility management companies continue to remain unchecked.
At InPower, the tenant is at the heart of our utility management services. We manage your power and electricity consumption and look for ways to optimise your energy usage, we also evaluate key energy-saving strategies. Our services also include engaging with the City of Cape Town and assisting in the process of moving you to the most suitable tariff available.