Eskom CEO Brian Molefe recently reiterated his strong view that legislation should be introduced to make prepaid electricity the norm for all South African households, in an effort to curb the utility's losses from theft and nonpayment. I couldn't agree with him more. This would be good not only for Eskom; it would be good for municipalities and for consumers, too.As things stand, municipalities across the country buy electricity from Eskom and on-sell it to their ratepayers. Eskom typically extends credit to these municipalities, and they, in turn, do the same for their postpaid customers.If their customers don't pay, the municipalities don't pay Eskom.The exception to this, prepaid customers, are typically the less affluent, in township low-cost houses.story_article_left1The call from Molefe is that we scrap the credit model altogether and we all - yes, including you in Sandton, Clifton and uMhlanga - use prepaid.Consider that the current arrears owed by municipalities to Eskom, including interest, increased 20% year on year to R6-billion this year. This is in addition to the widely reported R4.7-billion that is owed by Soweto residents, which has increased by 17.5% since 2015.So the amount owed is huge, representing about 7% of the total revenue generated by all of Eskom annually. But of even greater significance is the rate of increase of this debt.Add to this the lack of capacity in many municipalities to collect from their ratepayers, and you have an untenable situation where Eskom has to keep extending credit, but municipalities do not or cannot service this credit in time.This constrains the cash flow generated by Eskom, which negatively affects the price it is charged for the much-needed capital it raises for its infrastructure budget.Eskom has previously threatened to cut electricity supply to its worst defaulting municipalities.But we all know that's easier said than done. The political whiplash Eskom would suffer would be just too much to bear, and Molefe knows this, especially in these rather fluid political times.Apparently, Eskom did sign settlement arrangements with 60 municipalities, of which, unsurprisingly, 40 are not being honoured.In Soweto, the utility continues to face some resistance to prepaid meters. According to Molefe, meters were apparently burnt at one of the utility's stores there."We can only fathom this to mean that it is the movement from nonpayment to certainty of payment that people fear. There are certain members in society who are unhappy about the fact that there will be certainty of payment," he says.Of course, in the case of illegal connections, if all the electricity that is out there is prepaid, it would mean thieves would be stealing from residents who have paid upfront for the electricity - and not from Eskom.I guess that doesn't deal with the scourge of electricity theft itself, but it does move the financial burden away from the state-owned entity.story_article_right2Prepaid electricity is also good for households. It allows us to control our spending and track our consumption. It eliminates the surprise of a large bill come month-end, especially as we grapple with double-digit inflation on food prices, which we have no choice but to stomach.However, if we go down this road of prepaid electricity for all, we must develop easy and accessible ways to buy the electricity.Rural residents walk long distances to find an outlet that sells electricity. When this challenge was recently brought up in parliament, it appears Molefe didn't have a solution handy.I don't quite understand this, as there is ample technology that allows consumers to remotely recharge their prepaid meters.Perhaps it's a matter of adapting these products and technologies for rural communities that may not have access to mobile banking and e-commerce infrastructure.Given the prowess of our mobile networks and banking system, there should be no South African, irrespective of where they live, struggling to access the basic telecommunication services that can enable prepaid electricity for all.Khumalo is chief investment officer of MSG Afrika Group and presents "Power Business" on Power98.7 at 5pm, Monday to Thursday..