Eskom kisses R5.6 billion goodbye

Eskom lost approximately 14,000GWh of electricity sales, equivalent to R5.6 billion, to illegal connections and the like during the 2022/23 financial year.

The power utility also told MyBroadband that 28% of all unplanned outages it responded to between 1 April 2022 and 31 March 2023 were caused by theft, vandalism, and illegal connections.

“Illegal connections impact Eskom’s revenue negatively in the sense that illegally connected customers or members of the public consume electricity without paying for it, and they also damage the Eskom electricity distribution infrastructure, which then requires fixing,” it said.

“The overall energy theft for the 2022–23 Financial Year non-technical losses is 13,396GWh and is equivalent to R5,607,441,692.”

“This energy theft figure is inclusive of other significant contributors such as meter tampering, illegal electricity sales or vending, illegal network construction, illicit meter installations and material theft,” Eskom added.

However, the figure of R5.6 billion could be significantly larger. In July 2023, Mashangu Xivambu, senior manager for maintenance and operations at Eskom, said the utility lost R22 billion in revenue to “non-technical” issues.

Between 1 April 2022 and 31 March 2023, 28% of the unplanned outages to which Eskom responded were caused by illicit activities like illegal connections.

“In the Financial Year 2022/23 – 28% of all unplanned outages that Eskom responded to were related to theft and vandalism and illegal connections,” Eskom said.

“The associated cost in responding to these unplanned outages is in excess of R200 million. ”

The state-owned power utility also spends millions normalising areas with illegal connections, and this financial year is no different.

“In 2022/23, Eskom spent R227.8 million (incl. VAT) normalising areas with illegal connections,” said Eskom.

“In 2023/24, Eskom spent R65.9 million (incl. VAT) to date, normalising areas with illegal connections. The Financial Year for 2023/24 ends in March 2024, the process is still ongoing.”

In October 2023, law enforcement entities, including the South African Police Service, announced they were planning an illegal connection “attack”, which they believe could help cut two stages of load-shedding.

Following a South African Revenue Service-driven raid that resulted in the seizing of R63 million worth of equipment and multiple trucks across five provinces, Brigadier Ahtlenda Mathe said it was just the beginning.

“It is a wide spectrum with anybody from informal settlements, businesses and housing estates being involved. This week’s raids were a message to these people,” said Mathe.

“If we can break this down, we will save two stages of load-shedding. We are hard at work profiling these entities,” Mathe stated.

Eskom posts R24 billion loss

Illicit activities like cable theft and illegal connections are worsening Eskom’s already poor financial situation.

The power utility reported a net loss after tax of R23.9 billion for the 2022/23 financial year, effectively doubling the loss it reported for the year prior.

“[We had a] net loss after tax being increased almost two-fold … despite a 9.61% increase in tariffs,” said Calib Cassim, Eskom’s acting CEO.

Martin Buys, acting chief financial officer at Eskom, said factors like poor plant performance, delays in commissioning new independent power producer capacity, and criminal conduct are the most significant contributors to Eskom’s poor financial performance.

However, he said losses from criminal conduct — such as theft, illegal connections, corruption, and vandalism — also contributed to Eskom’s overall net loss of almost R24 billion.

Now read: Load-shedding breaks are back — here is the new timetable

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Eskom kisses R5.6 billion goodbye