Eskom proposes major electricity meter change

Eskom board chair Mteto Nyati says the power utility wants to establish arrangements with municipalities owing it money, through which it will assist them in implementing smart meter technology to improve revenue collection.

According to data from the Department of Co-operative Governance and Traditional Affairs, municipalities and metros across the country collectively owed Eskom R109.4 billion as of 8 January 2025.

Speaking to Newzroom Afrika, Nyati explained the power utility’s proposal to the Standing Committee on Public Accounts, presented on Thursday, 27 February 2024.

“Our proposal says all of the key municipalities that are owing Eskom need to ringfence their electricity business,” said Nyati.

He explained that when customers pay municipal electricity businesses, the money must go into a pot specifically for operating the electricity business.

“The money that is collected… it does not get lost when it gets into municipal accounts. Then you pay Eskom what you owe Eskom and the rest goes into the municipality,” he added.

Nyati explained that municipal mismanagement of collected revenue needs to be addressed urgently, or it could “pull South Africa down”.

“We need to make sure that municipalities are working,” he said.

“One of the first areas that we want to focus on is to make sure that the electricity part works. We are going to be working with them and help them collect.”

According to the Eskom board chair, some municipalities can only collect around 60% of what they should be collecting.

“Why? Because they don’t have the funds to invest in implementing smart meters that can help them to collect more,” he said.

“Through this arrangement with municipalities, part of that will be helping them to go and implement these smart meters in households, and that will help with the revenue collection.”

He added that the shift to smart metering technology would help municipalities repay their debts to Eskom and reinvest some of the revenue collected into their electricity networks.

R3.1-trillion municipal debt warning

Municipal debt owed to Eskom grew rapidly in 2024, increasing from R70 billion in March 2024 to R78 billion as of July 2024, and now nearly R110 billion.

In July 2024, Electricity and Energy Minister Kgosientsho Ramokgopa warned that leaving the problem unaddressed would be catastrophic for the country.

He explained that the situation was also to blame for hefty municipal electricity tariff hikes.

Ramokgopa said the municipalities’ debts, which amounted to R78 billion at the time, were of significant concern. Municipal debt to Eskom has only risen since.

“It’s important that we have engagement with municipalities. If the current trend line continues, the collections and payments we are seeing now, if you extrapolate it to 2050, will be about R3.1 trillion. This is huge,” the Minister said.

With municipalities trying to raise money to repay their debts to the state-owned utility while maintaining their grids, they are forced to apply for electricity price hikes.

This trend will lead to significant problems for low-income households, and some municipalities have already been forced to implement load reduction.

“That’s why it’s important that this conversation must happen and quickly because we also want to address the issues of load reduction,” said Ramokgopa.

“It has nothing to do with generation, but the consumer’s experience is the same. There are hours in the day that they don’t have electricity.”

He explained that hefty municipal electricity tariff hikes lead to what he terms energy poverty, which is when power is available through the grid but poorer households can’t afford to access it.

“There’re many households that can’t objectively afford the cost of electricity, which is rising at an exponential rate,” the Minister said.

“They must choose whether to reload the units on prepaid or buy bread or pay school fees. Those are difficult choices. Those we need to resolve with municipalities.”