R2-billion Eskom revenue pain

Eskom says that if illegal electricity consumers became paying customers, the energy utility could increase revenue by R2 billion monthly.

This is according to Eskom operations and maintenance manager Daphne Mokwena, who told eNCA that if its “zero buyers” started legally purchasing electricity, it could dramatically increase revenue, allowing it to operate more efficiently.

Eskom uses the term zero buyer to describe someone who consumes electricity without purchasing it.

This could be because they buy vouchers from so-called “ghost vendors” or their meter is bypassed. Essentially, it means these users have been consuming electricity illegally.

“If you take the 400,000 zero buyers who have now become legal consumers and assume that they spend R1,000 per month on electricity, you’re already looking at R400 million per month,” Mokwena said.

“If all of the 1.7 million can start paying, then we are looking at about R2 billion per month and just under R30 billion per year that we can receive in revenue.”

Mokwena’s statement confirms MyBroadband’s previous estimates about the number of illegal electricity users and how much revenue they were potentially costing Eskom.

Using data from Eskom’s KRN rollover dashboard and research about the average electricity consumption profile in South Africa, we calculated that the state-owned power utility was losing tens of billions in annual revenue.

Eskom recently announced that it would provide amnesty to zero buyers who come forward and take part in the Key Revision Number (KRN) 2 rollover programme by Friday, 13 December 2024.

As Mokwena mentioned, 400,000 of the 2.1 million zero buyers have updated their meters, forcing them to start paying for electricity. This leaves 1.7 million households still consuming electricity illegally.

“In the past ten days, we saw zero buyers coming forward in huge numbers wanting to buy electricity and do the right thing,” said Eskom’s group executive for distribution, Monde Bala.

“We will continue to treat these users with dignity and respect as we resolve these issues for all who did the right thing.”

The power utility said zero buyers who bought electricity before the 24 November deadline but have a lost, bypassed, or tampered meter must report to an Eskom centre by the 13 December deadline.

Eskom will then assess each customer’s individual situation and issue tamper fines if necessary. Meter updates and replacements can then be scheduled.

Those who failed to purchase electricity tokens by the old deadline are still encouraged to buy electricity by 13 December.

They can then have their meters audited and be issued the necessary tamper fines and replacement costs.

Zero buyers have been encouraged by the power utility not to leave this to the last minute.

Eskom said paying customers who have updated their meters but are experiencing technical difficulties should use its chatbot Alfred, its contact centre’s interactive voice response, and WhatsApp.

These customers will not be penalised.

“We acknowledge also that this was a complex process presenting a challenging set of issues and was at times fraught and we continue to monitor and stabilise the system to ensure a smooth customer experience,” said Bala.

Eskom CEO Dan Marokane has said that the power utility is doing everything in its power to ensure that users of electricity pay for it and that paying customers maintain Eskom’s sustainability to drive economic growth in the country.