The ZESA prepaid token system is the irk of electricity retailing

With second reports of a ZESA prepaid tokens blackout, after the officially communicated one some months back, one is left wondering what the real issues are. It cannot be an issue of technology as ZESA commercial services itself has the capacity to implement a renowned enterprise system like SAP. Looking at the setup of the prepaid tokens reveals a few possible flaws.

Everything is prepaid: The commercialised token systems is prepaid (lesson learnt from high default rates) from start to the end of the consumption chain. The middleman distributor or financier must buy tokens from ZESA for reselling to the public and the public must buy prepaid tokens for use. Now, due to the liquidity and cash flow challenges, the business model is vulnerable to the current economics. If the financier, say Petrotrade, at any time is unable to buy tokens and replenish their stock, their distribution network becomes obsolete. Unfortunately, they can easily get away with the “system is down” excuse which simply puts the blame on ZESA.

Redundancy is costly: The ideal situation in the IT equipment required is such that if one channel fails to connect to the token servers, a backup system should quickly kick in with no resultant downtime. Unfortunately, the distributors only have that one primary channel with no financial capacity for redundancy. This is how you end  with up issues like “we are going down for maintenance”. Imagine Google going down for a couple of hours to perform upgrades.

Token system is online based: The one limitation of an online system is that even though a distributor gives out prepaid scratch cards or otherwise, there is that extra leg that is required for authentication with the main token server. If a post paid intermediary based on trust could be established, it would do a lot to counter the requirement to authenticate tokens online. Sort of like a half step between the customer and ZESA.

Unfortunately, neither ZESA nor the distributors are willing to take the risk of providing that service because of the perceived default. To make things worse, the communications usually run on the public networks as opposed to a dedicated link. If OK Zimbabwe network is down for any reason, the whole system will not work event though ZESA is up.

There are no smart meters yet: If the smart meter tender saga would end, the rollout of smart meters could do a lot to cover the gap. A post paid function can be enabled to allow customers to access without the mediation of distributors, small emergency credits of $5 or so to be paid on the next token purchase. It would sort of be like the airtime credit offered by mobile operators.