Utility gets hands-on
Eskom is hoping to get itself out of the municipal debt trap by taking over electricity metering and revenue collection at defaulting municipalities.
This will, however, add another layer of cost and, as such, municipalities would have to pay Eskom a service fee and several other fees.
In a presentation dated December 19, 2016, that Moneyweb has seen, Eskom makes the proposal that would see it collect electricity revenue in affected municipalities, keep what it is owed for bulk services and applicable fees and pay the balance to the relevant municipality.
Eskom spokesperson Khulu Phasiwe has confirmed that this proposal would be presented at the next meeting of the parliamentary portfolio committee for public enterprises.
The joint meeting of portfolio committee and the select committee on cooperative governance and traditional affairs was scheduled for January 26 to discuss Eskom’s electricity cuts to defaulting municipalities. It is during this meeting that Eskom was hoping to present its proposal.
In a statement last week, the Democratic Alliance said the meeting was, however, cancelled, as ANC members “would rather attend a lekgotla”. A new date has not yet been confirmed, but Phasiwe said it might take place a day earlier.
This is against the background of a statement issued by Eskom on January 22. Eskom announced that it would proceed to cut electricity supply to a list of 22 defaulting municipalities during the morning and evening peak periods. Since then, several of the municipalities have reached a payment agreement with Eskom and their names were taken off this list.
Last week, public enterprises minister Lynne Brown, who represents government as sole shareholder in Eskom, requested the utility suspend the power cuts until the end of the month, and Eskom agreed.
According to Phasiwe, the proposal Eskom will make in parliament follows after the provincial governments of North West, the Free State and Mpumalanga called on Eskom to take over the electricity supply in the struggling municipalities.
He told Moneyweb this was meant to be a temporary measure, as electricity distribution was a municipal competency in terms of the Constitution.
Eskom further proposes it takes over the revenue collection in the relevant municipalities. It will secure funding and convert all customers to smart prepaid meters, collect the revenue at municipal tariffs, “take what is due to Eskom and pay over to the municipalities what is due to them”.
Eskom says it will provide the service at a nominal fee, including a leasing fee for the meters. – Moneyweb