Eskom’s massive Soweto headache
Financially stricken power utility, Eskom says that debt collection from municipalities and small power users remains a concern, with Soweto in Gauteng a particular concern.
As the company negotiates with government over a a financial plan for 2015, in order to keep the lights on, its total municipal arrears debt “remains high” at R4-billion as at 30 September 2014.
Alarmingly, “Soweto’s arrear debt continues to increase,” Eskom has said. The total Soweto debt, as at 31 March 2014, stood at R3.6 billion (31 March 2013: R3.2 billion), excluding interest charged on overdue amounts.
Eskom supplies electricity to about 180,000 households in Soweto and average payment for the year is 16% (2012/13: 16%), the state owned company said.
According to electricity expert Chris Yelland, the elimination of non-technical electricity losses in South Africa – i.e. electricity theft and non-payment – would avoid the need for the Stage 1 (1000MW), Stage 2 (2000MW) and Stage 3 (3000MW) load shedding.
Yelland said that non-technical losses amount to about 7% of energy (kWh) generated in South Africa.
In Soweto, Eskom said that during the year, 4,838 defaulting customers were disconnected, “which is not enough to curb the debt”.
Softly, softly, approach
“Eskom is working closely with the Department of Public Enterprises, the Co-operative Governance and Traditional Affairs (CoGTA) department and Treasury at both provincial and national level to address the systemic causes of the municipal arrear debt,” the company told BusinessTech.
“Eskom makes every effort to ensure that customers pay their accounts. It constantly monitors payments and is willing to enter into reasonable payment agreements that take into account defaulting customers’ circumstances,” it said.
“Disconnection of electricity supply is a measure of last resort for Eskom.”
The utility said that, historically, payments by municipalities are strongly correlated to them receiving the equitable share from National Treasury (payments in December, March, June and September).
“Previously this funding was sufficient to settle outstanding electricity debt, but this is no longer the case with municipalities facing increased electricity prices and reduced funding,” Eskom said.
In line with the Promotion of Administrative Justice Act (2000), the company said it sent disconnection notices to some of the defaulting municipalities during 2013/14 financial year.
Worryingly, however, “no disconnections have yet been effected,” Eskom said.
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