Massive prepaid electricity meter crackdown in South Africa

The South African Local Government Association (SALGA) says that the mandatory updating of prepaid electricity meters has allowed municipalities to identify non-vending meters — including those that are illegally bypassed, enabling electricity theft.

Eskom and municipal electricity distributors are currently running their respective key revision number (KRN) rollover projects.

These updates are required for meters to continue accepting new electricity vouchers, or tokens, from 24 November 2024.

The meters are set to run out of range for generating identifiers embedded in each token, part of a security mechanism to avoid the re-use of older tokens.

The token IDs are based on a timer that began counting every minute on 1 January 1993. The update being rolled out resets the date from which meters start counting.

Every meter that complies with the Standard Transfer Specification around the world is affected.

To update meters, Eskom and municipalities require that customers input two KRN codes provided with legal electricity voucher purchases.

Eskom and SALGA provide online dashboards for the public to track their progress in updating the meters.

MyBroadband recently noticed that the total number of meters on SALGA’s KRN rollover dashboard declined from 4.74 million in May 2024 to 4.29 million in recent weeks — a drop of about 350,000 meters.

SALGA explained this significant reduction was due to the scrapping of meters that multiple municipalities found were non-vending.

“Non-vending meters are a combination of faulty and bypassed meters, as well as duplicates from the municipal database,” SALGA said.

SALGA said these meters had been loaded with a key change on the vending system — referred to as “precoding” by Eskom — but had not been recoded with the KRN rollover codes provided to customers.

If a meter is not updated within a certain period after being precoded, it shows that it is not in use, has been bypassed, or that its user is buying illegal electricity tokens from “ghost” vendors with lost or stolen electricity vending equipment.

SALGA said that municipalities are replacing these meters with new ones that have already been updated.

While not the primary intention of the meter updates, the process has evidently helped municipalities identify customers buying illegal electricity or bypassing their meters.

“The project has provided an opportunity to clean up the meters database and replace the non-vending meters, which has resulted in revenue increases from electricity sales to prepaid metered customers,” said SALGA.

SALGA anticipated that the total number of prepaid meters would likely decrease further as municipalities picked up non-vending meters when they reset them or conducted audits.

One of the areas with a high number of non-vending meters is Johannesburg, which accounted for 142,000 of the non-vending meters removed from the rollover record.

These are all pending replacement by City Power as part of the metro’s revenue protection programme, suggesting that most of these meters were being bypassed or using illegal electricity tokens.

Municipalities on track for completion — while Eskom lags

SALGA said it expects that municipalities will have updated all vending meters on time for the deadline.

As of 16 September 2024, 84% of the revised 4.29 million municipal meters were recoded.

“The 687,000 prepaid meters left to be converted are doable since municipalities are hard at work and on the ground on a daily basis,” SALGA said.

“The only possible meters that may not be updated on time are those in holiday homes/houses that are regularly unoccupied.”

Eskom’s KRN rollover project is far behind SALGA’s, with less than 60% of its 6.9 million prepaid meters having received updates as of 16 September 2024.

The slow rate of meter updates on Eskom’s dashboard also suggests that many of its prepaid customers have non-vending meters.

Nearly two months after it announced it had precoded roughly 6.6 million prepaid meters, over 2.5 million meters remain to be recoded by customers.

Therefore, it seems increasingly likely that many of these meters are non-vending, which Eskom said could be due to one of four reasons:

• The meters have been bypassed and are consuming electricity without running down their units.
• The meters are being loaded with illegal electricity tokens from illegal or “ghost” vendors with stolen or lost electricity token issuing devices.
• The meters are in areas that Eskom has disconnected.
• The meters are loaded with a large amount of electricity. This is less likely considering how Eskom’s Incline Block Tariff structure discourages bulk buying.

If even half of the outstanding meters are not getting loaded with legal electricity tokens, Eskom will have vastly underestimated the impact of stolen electricity on its revenues.

The power utility has estimated that it lost about R5 billion to electricity theft annually.

However, MyBroadband’s calculations — summarised in the table below — estimated that these losses could be substantially higher than the utility determined.

Estimated customers buying illegal electricity and bypassing meters	Revenue lost from 450kWh average monthly consumption	Revenue lost from 600kWh average monthly consumption	Revenue lost from 900kWh average monthly consumption
1 million	R18.13 billion	R23.28 billion	R39.82 billion
1.5 million	R27.20 billion	R34.91 billion	R59.73 billion
2 million	R36.26 billion	R46.56 billion	R79.64 billion
2.5 million	R45.33 billion	R58.20 billion	R99.55 billion