Eskom CEO Brian Molefe is of the view that legislation in South Africa should be changed, making it standard to use prepaid electricity.
Speaking to MPs during a parliamentary briefing with Eskom and the Select Committee on Communications and Public Enterprises about the power utility’s tariff hike for 2016 to 2017, Molefe said prepaid electricity would go a long way towards curbing Eskom’s losses due to non-collection and illegal electricity connections.
“I know it’s been said in the media that I – Brian Molefe – am not supposed to say anything about energy policy,” he said in reference to a report that National Treasury was unhappy about his utterances on independent power producers.
“If you would allow me to just say as a lowly official – we think prepaid electricity should be standardised. If we have it through the entire country it would resolve our problems, and the shortest way is by introducing legislation on prepaid.”
Molefe also proposed that Eskom “step in”, install prepaid meters and collect revenue and then pass on to municipalities the portion of collections due to them. “That will take away the burden of collection. So the municipality will still get their revenue, but Eskom becomes the collecting agent.”
Molefe added that Eskom would also be happy if legislation is introduced that allows the utility to appeal energy regulator Nersa’s decisions. “Currently if one party is unhappy – Eskom in this case – about an aspect in the Nersa ruling there is no way we can appeal, except maybe to (go to) the courts. We’d be happy if we could appeal if we feel there was an error in the calculations.”
Consumers who receive power from municipalities paid 7.64% more for electricity since the beginning of July. This comes after Nersa approved a 9.4% hike for 2016 to 2017.
Eskom has already seen a ZAR39 million improvement of revenue collection in Soweto over a year-long period after it installed and converted customers to split prepaid meters.
The figure is cumulative from the 2014/15 financial year up to 30 June 2016.
The revenue collection levels for customers – including Large Power Users (LPU), Prepaid Power Users (PPU) and Small Power Users (SPU) and excluding bulk suppliers – are currently at 48%.
Soweto has approximately 181 000 customers, about 65% of whom are customers who are on conventionally-billed metering system and the remainder are on conventional prepaid metering system.
We have installed over 41 628 split meters and converted 24 746 to prepaid and are planning to accelerate the roll out of prepaid meters in Soweto.
The conversions of the meters have also resulted in a gradual increase in sales.
Eskom is currently installing prepaid meters in Sandton, Midrand, Soweto, Kagiso and other areas around Gauteng.
This is in order to enable revenue collection and address Eskom’s debt collection challenges.
In Sandton and Midrand alone, Eskom connected close to 14 700 meters from March 2016 to date.
The company aims to complete the installation of 32 000 prepaid meters in Sandton and Midrand by end of March 2017
Eskom says Soweto residents are starting to understand the relevance of prepaid electricity meters, adding that it plans to install 140,000 meters in the area, in the next three to five years.
Last year, community members took to the streets demanding engagement with the parastatal about the prepaid meters and a way forward in terms of dealing with the municipality’s R8 billion debt.
So far, 40,000 meters have been installed in the area….
Eskom has made a strategic decision to convert all of its conventionally billed customers to prepaid meters.
It says this project will enhance its revenue which is an important focus area to support its financial sustainability efforts.
“Customers are encouraged to convert from their conventional meters to the prepaid billing mode as it has several benefits such as improved reliability‚ reduction of public safety incidents and better management of energy consumption. More importantly‚ the days of billing errors will be a thing of the past‚” the electricity provider says.
In Sandton and Midrand‚ the plan is to have all 32‚885 of its domestic customers with smart meters installed and converted to prepaid meters by the end of the 2016/17 financial year….
On Thursday, South Africa’s state-owned power utility, Eskom, said that it is currently installing prepaid meters in Sandton, Midrand and Soweto as well as Kagiso, with the objective being to enhance revenue to support the company’s financial sustainability efforts.
Plans for Johannesburg’s large urban settlement, Soweto, which has an estimated 180,000 customers, of which 80% are connected to a conventional billed metering system, include converting all users to split prepaid meters within the next 5 years.
The utility highlighted in a company statement that customers will reap additional benefits such as improved reliability, reduction of public safety incidents and better management of energy consumption.
The company added that the days of billing errors will be a thing of the past.
In 2013, Eskom embarked on a project of installing split prepaid meters in Soweto, which resulted in a ZAR33.63 million ($2 million) revenue improvement in Soweto. The improved revenue collection is owed to the installation of 40,000 split prepaid meters and having converted over 13,000 to prepaid mode….