Eskom smart meter push

In the struggle to constrain the ever-increasing debt owed to Eskom by South African municipalities, the utility’s CFO, Calib Cassim, is looking to technology in the form of smart meters.

While numerous municipalities have signed up for the municipal debt relief programme, Cassim said, “it is not achieving the desired outcome” during a roundtable hosted by the South African National Energy Association.

However, he pointed to smart meters as a potential solution to the problem.

In February last year, the National Treasury announced that R2 billion would be invested in procuring locally produced smart meters for municipalities as part of the debt relief programme.

This would include training of municipal staff to manage the meters.

Currently, 71 municipalities have signed up for the debt relief programme.

According to Eskom, smart meters have several benefits, such as allowing customers to track their electricity usage to better control their consumption.

These meters also have anti-tampering technology and tamper alarms to detect meter bypassing.

Eskom operations and maintenance manager Daphne Mokwena previously said zero buyers, people who do not pay for their electricity usage, caused the utility to lose roughly R2 billion in monthly revenue.

These zero buyers include people bypassing their electricity meters.

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

Cassim added that Eskom can remotely connect to smart meters when the grid is under pressure to disconnect supply and reduce demand.

Eskom board chair Mteto Nyati recently echoed Cassim’s stance on smart meters, saying that the power utility needs to assist municipalities in implementing the technology.

“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.”

To reform this mismanagement, electricity and energy minister Kgosientsho Ramokgopa announced that Eskom plans to use an active partnering approach.

The approach involves the municipality remaining the licensed distributor of electricity. However, it enters an agreement allowing Eskom to assist with billing, revenue collection, infrastructure maintenance, and reticulation services.

The municipality entering the agreement also requires its electricity accounts to be separated from other municipal finances and the free basic electricity grant to be administered by the state utility.

Additionally, Eskom will help precincts invest in infrastructure upgrades through municipal borrowing, grants, and Public-Private Partnerships.

Ramokgopa pointed to the case study of Maluti-a-Phofung Municipality in the Free State, which had one of the worst-performing electricity distribution administrations, as proof of the initiatives’ effectiveness.

This included massive arrears to Eskom, severe infrastructure neglect, and over 60% of customers consuming electricity illegally.

However, by implementing the Active Partnering Model, Eskom helped Maluti-a-Phofung to recover R2 billion in outstanding payments and reduce electricity theft and illegal connections.

Eskom also assisted the municipality in reducing unplanned outages by repairing infrastructure and investing in meter audits to improve billing accuracy.

Maluti-a-Phofung is no longer adding to its Eskom arrears, and revenue from paying customers is being used to fund infrastructure upgrades.

Ramokgopa noted that the programme has also been implemented in the Modimolle-Mookgophong, Thabazimbi, and Bela Bela municipalities and will soon be extended to others in the Free State and North West.