Prepaid electricity meter disaster

Over two million prepaid electricity meters in South Africa will no longer accept electricity tokens by the end of this week.

However, the immediate impact of this may be limited as a significant chunk of the people using these meters may be stealing electricity through connections bypassing them.

Eskom and municipalities across South Africa have been scrambling to get their customers to recode a combined 11 million prepaid meters with the key revision number 2 (KRN 2) update in the past year.

The recoding is necessary due to a time-based security mechanism in Standard Transfer Specifications (STS)-compliant meters called the token identifier (TID) running out of range on 24 November 2024.

Despite having a decade to perform the update, Eskom only started preparing meters for KRN rollover — what it has dubbed as “precoding” — about a year and three months before the deadline.

The power utility and local municipalities do not have sufficient resources or workforces to perform the updates themselves, so they are relying on customers to enter two 20-digit codes to update their meters to KRN 2.

With less than a week to go, over 2.6 million meters across Eskom and municipal databases had not received the updates.

Eskom repeatedly insisted that it was on track to meet the deadline with its KRN update process during the past year.

In May 2024, the utility revealed that it had passed the halfway mark with 3.61 million of its customers’ meters recoded in the eight months since it started the project in August 2023.

That works out to an average of about 451,250 meters updated per month.

However, the meters updated figure had only increased by about 1 million in the six months since, working out to an average of 77,500 meters per month.

With just a week to go, 2.26 million more Eskom Direct customers must update their meters, or they will no longer be able to load electricity vouchers.

Nearly 300,000 meters in municipalities also remained outstanding.

While a handful of municipalities — such as the City of Cape Town — started with their update process several years ago, many only embarked on their KRN projects in the past year.

The South African Local Government Association previously told MyBroadband it expected all municipalities to finish their KRN rollover on time.

The screenshots below show the KRN rollover progress made by Eskom and municipalities as of 17 November 2024, a week before the deadline.

Eskom KRN rollover progress — 17 November 2024

Municipal KRN rollover progress — 17 November 2024

Real disaster not for customers — but for Eskom

Although all the un-updated meters can still be upgraded to KRN 2 after 24 November 2024, the fact that around a fifth have remained outstanding before the deadline is concerning.

Over 6.4 million of Eskom’s meters had been pre-coded by the end of July 2024, which means their next electricity purchase should have included their recoding tokens.

The meter could not process legal electricity tokens without the customer first entering the KRN 2 codes.

Despite this, Eskom customers’ meter recoding rate crashed in the past few months.

Considering the current electricity price regime punishes bulk buying, it is highly unlikely that most of these customers have not updated their meters because they had enough electricity to last for months.

Eskom suspects that syndicated theft, illegal connections, socio-economic issues, and a culture of non-payment were the main reasons for the slowing KRN update rate.

TID rollover project coordinator Riccardo Pucci previously also warned that if the meters were not updated on time, it could increase electricity theft among customers who are not currently consuming power illegally.

“You are going to get record numbers of meter bypasses,” Pucci said. If the revenue protection problem was an issue before, it’s going to skyrocket,” Pucci said.

However, the process could also create an opportunity for Eskom and municipalities to perform inspections at the addresses of the customers who have not updated their meters, given the likelihood that they have bypassed their meters illegally or are consuming illegally-vended electricity.

Eskom has explained that meters updated to KRN 2 will not accept tokens generated by stolen or missing electricity vending machines, sold by so-called “ghost” vendors.

Revenue from these machines doesn’t go into Eskom or municipalities’ coffers.

Had Eskom and municipalities embarked on their KRN rollover projects sooner, they may have been able to identify electricity thieves much earlier.

If the customers with the outstanding 2.5 million prepaid meters have all been consuming electricity illegally either through bypassing or ghost tokens in the past few years, they would have cost Eskom and municipalities tens of billions of rand in revenue every year.

The table below estimates how much revenue Eskom may be losing to customers through illegal electricity connections and tokens in the current financial year.

Keep in mind that these figures only account for customers on Eskom’s books.

There are likely many more that have illegally connected to the grid of which Eskom and municipalities are unaware or have no linked details.