Eskom’s R500-million fine frenzy

Eskom has issued over 100,000 fines for electricity theft in the past few months, some of which were exposed by the key revision number (KRN) rollover.

While this is not an insignificant amount, it is likely that a minimum of 1.9 million more prepaid users also stealing electricity from the power utility and municipalities have not been fined.

Eskom told MyBroadband a “normal” household was fined about R6,052.30 for their first tampering violation. For a repeat offender, the second fine is doubled to R12,104.60.

Individual fines could also be lower or higher based on specific circumstances, which makes an accurate estimate of their exact value impossible.

However, Eskom said the combined value of the fines exceeded half a billion rand.

The 100,000 figure was first reported by Eskom in early December 2024 and repeated again in feedback to MyBroadband in mid-January 20-25.

The figure has stagnated despite Eskom supposedly ending a grace period for “zero buyers” to come forward and acknowledge their wrongdoing without being punished with additional penalties.

While it did not share an updated fine payment figure, the power utility previously said that only 15% of the fines had been paid or “partially” paid.

Eskom’s action comes in the wake of the KRN rollover project, which required updating software in more than 11 million prepaid meters so they could continue accepting new tokens after a security mechanism ran out of range.

While not the project’s intention, the KRN event also helped municipalities and the power utility identify so-called “zero buyers,” including those who stole electricity through illegally bypassed meters and the use of illegal tokens.

Electricity minister Kgosientsho Ramokgopa recently told Parliament that an estimated two million prepaid users were consuming electricity illegally.

That roughly corresponds to the number of Eskom and municipal customers who failed to update their prepaid electricity meters in time for the KRN rollover event on 24 November 2024.

Eskom pre-coded nearly all meters before the rollover date, which should force their users to enter two 20-digit codes to update their meters before they could load more electricity.

However, about 1.9 million of its meters were not updated in time, as well as 222,000 meters belonging to municipalities.

Eskom explained it was likely that these customers had bypassed their meters to consume electricity without having to buy tokens or were buying tokens from unauthorised vendors that were not generating their KRN 2 codes.

13.9 billion kWh lost to theft

In December 2024, Eskom also revealed that it suffered 13.9 terawatt-hours — 13.9 billion kilowatt-hours — of electricity theft in its 2023/2024 financial year.

Eskom estimated the theft cost R23 billion in revenue, based on an average electricity price of R1.65 per kWh.

The power utility said that figure encompassed all forms of energy theft, including instances related to zero buyers.

“The challenge of energy theft remains significant, affecting both financial sustainability and the reliable provision of electricity,” the power utility said.

Eskom’s estimate may be overly-conservative, as the minimum tariff it charges on its subsidised Homelight plan was R1.94 in the 2024 financial year.

The majority of Eskom’s direct customers are on the Homepower 4 tariff, which had a minimum charge of R2.50 per kWh for the first 600kWh of consumption in that financial year.

Based on that tariff, the total lost revenue would have been around R35 billion.

The power utility recorded a R25 billion loss before tax in its financial year. If it had collected all the revenue it estimated was lost to theft, Eskom would have been near breakeven before taxes.

Illegal electricity fight continues

Eskom said about 400,000 former zero buyers had become paying customers in the weeks before and after the KRN rollover event.

The power utility told MyBraodband it was actively conducting targeted audits to tackle energy theft and is continuing with its smart meter rollout programme to mitigate non-technical losses and optimise its billing system and processes.

“Eskom remains committed to enhancing its crime prevention, monitoring, detection, and response strategies, which, due to their sensitive nature, must remain confidential,” the power utility said.

“By collaboration with other state-owned entities, the private sector, and law enforcement agencies, Eskom leverages both human capital and technology resources to mitigate and ultimately eliminate the security threats that confront its infrastructure.”

Eskom is encouraging customers to pay for the services they receive and qualifying poor households to collect their Free Basic Electricity of 50kWh per month.