By Bisola Adeyemo
The South African Local Government Association (Salga) has sought court order to distribute and sell electricity throughout South Africa.
Salga will ensure to cover the entire landmass of South Africa, the eight metropolitan municipalities, 44 district municipalities, and 205 local municipalities in South Africa, the boundaries of which extend wall to wall across South Africa.
If successful, the Salga court action would require Eskom to obtain permission and to enter into service delivery agreements (SDAs) with each of the municipalities in which the national electricity utility currently owns and operates its electricity transmission and distribution networks.
Eskom says it will vigorously defend its rights in terms of the Electricity Regulation Act.
As South Africa’s national electricity utility, Eskom has had transmission and distribution licences from the National Energy Regulator of South Africa (Nersa) ever since the regulator’s inception.
Eskom supplies electricity directly to about 6.9 million customers in South Africa. These include about 6.7 million residential customers, 53,000 commercial customers, 3,560 mining and industrial customers, 78,500 agricultural customers and 470 rail customers across the country.
The ministers of Mineral Resources and Energy, Public Enterprises and Cooperative Governance and Traditional Affairs, and the regulator, Nersa, are also named as respondents in the Salga application.
Salga’s court application seems to ignore the fact that many municipalities across South Africa are in fact failing in their service delivery obligations. At grassroots level, there is deep dissatisfaction by residents with service levels and quality of supply in these municipal areas, as evidenced by widespread and ongoing protests and civil unrest.
Many municipalities are in a state of dire financial distress, with associated failures in municipal administration, billing, revenue collection and asset protection. Domestic and business customers receiving power from municipal electricity distributors complain of exorbitant mark-ups on electricity procured from Eskom, and extensive and ongoing power supply outages as a result of old and poorly maintained municipal electricity distribution infrastructure.
The weak financial and administrative state of many municipalities across South Africa is such that not only are they unable to collect revenue adequately from their customers, but they are also unable or unwilling to pay for the electricity they procure from Eskom. Currently, municipal arrear debt to Eskom by municipalities exceeds R40-billion, and this is rising unabated at a rate of about R8-billion a year.
As a result, Eskom has been forced to engage in what is euphemistically known as “load reduction”. This involves cutting electricity supply to offending municipal areas during certain hours of the day, both as a credit control mechanism and to avoid overloading of Eskom’s power system by customers who do not pay for the electricity they use.
All of this is proving massively disruptive to the operations of businesses receiving power from municipal electricity distributors, and results in loss of revenue, productivity and jobs, and an inability to grow and adequately serve South Africa’s needs for economic recovery and growth following the Covid-19 pandemic.
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