Eskom group CEO Dan Marokane says the utility is “happy that the right level of alertness” has been raised on the crippling debt owed to it by municipalities as he called for a return to the “drawing board” to find a solution to the issue.
Board chairperson Mteto Nyati flagged this issue, along with illegal connections, as Eskom's main concern during his opening remarks ahead of the presentation of the utility's summer outlook.
Municipal debt now stands at R78bn and continues to grow monthly.
If we think about the big things ... that keep us awake at night. The problem of municipality debt is a huge problem, this is one of those [things] that each and every month, the amount continues to grow
— Mteto Nyati, Eskom board chair
“If we think about the big things ... that keep us awake at night. Municipal debt is a huge problem. This is one of those [things] that continue to grow each and every month.
“This has to come to an end. We need to figure out and find solutions. This is not one of those we can do by ourselves as Eskom; we need society, government and the municipalities themselves [to work with us]. It's really surprising that in some cases, monies are being collected from the communities but they're not being paid over to Eskom,” said Nyati.
Adding to this was Marokane, who reacted to a recent news report on the National Energy Regulator of South Africa's (Nersa) proposal to revoke the distribution licences of municipalities failing to settle their debt to Eskom.
Speaking to TimesLIVE Premium on the sidelines, he conceded he still needed to “understand more substantively the saying behind it” as he was yet to fully engage with the report.
“Suffice to say that we're now convinced that we've comfortably made the point that the current interventions for dealing with municipal debt are not sufficiently curbing this problem and that all the role players need to come back to the table to look at what is sustainable going forward,” he said.
“It may be that Nersa has a view already at this point. I know that Salga [and the] National Treasury also have a view and we have a view. All we're calling for is a very focused engagement of all stakeholders so that we can get out of this. We are happy that the right level of alertness is there now.”
Marokane said Eskom, for its part, was not just playing a waiting game but also having a number of “active partnerships that we embark on” for municipalities that ask for their help.
“It's not like government has not been doing anything. There's also a municipality debt relief programme that was instituted at the beginning of this year. We now have sufficient data points to establish that it's not working,” he said.
“It's for that reason that we are saying it's time to go back to the drawing board with all the insights we have — and more so with the authority of a focused government-led programme to engage on this. So the municipal debt and reforms are now quite central on the table.”
Speaking on illegal connections was head of distribution Monde Bala, who said the utility had started engagements on “how to reform the distribution industry” given the “severe underinvestment” in this infrastructure by municipalities.
Eskom in July announced it would implement load reduction in areas affected by network overloading, citing increased demand for power during the cold snap and electricity theft as factors. Eskom said it was losing R5bn to illegal connections.
“We really tried to make the point that we respond to the situation at a [specific] point in time,” said Bala.
“Yes, during winter the demand is higher than in summer, but we still need to actively monitor loading on the local network to the extent that if there is a problem or we identify that we're going into a situation where the transformer will overload, then we need to proactively take those steps to make sure that we do not damage those transformers.”
Prepaid meter upgrades on track for November deadline
Bala also provided an update on the progress made in the key revision number rollover project.
Eskom in July confirmed that a total of 6.6-million prepaid meters out of a total of 6.9-million had been recoded ahead of the November 2024 deadline. The current prepaid meter software will expire and any meter that has not been coded by the deadline will not upload prepaid tokens, which will leave customers without electricity supply.
Eskom adopted a do-it-yourself approach that would allow customers to make the switch themselves through getting a token to put in their meter. This initially bore fruit but “stagnated ... about the 3-million mark” around the end of May.
“So we then, being cognisant of the November date, took a different approach whereby we have pre-coded all the meters to the extent that when the customer buys the next token, the digits for the changeover programme will be on the voucher,” said Bala.
“It won't matter when that [purchase] will happen, whether it's before or after the November date, they will have the ability to convert their own meters at the point of purchase.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.