Municipalities must prioritize electricity services

Monday, September 28, 2009

Port Elizabeth - Electricity services are a key revenue generator for municipalities and therefore need to be prioritized.

"Municipalities must treat electricity supply as a jersey cow that gives the milk, for it to continue producing milk you must give it the best pastures and care for it so that it can continue giving milk for many more years," said Minister of Energy Dipuo Peters, on Monday.

Dipuo said some municipalities were resisting the investment in the electricity infrastructure maintenance primarily because government was working on establishing the Regional Electricity Distribution Services (REDS).

She stressed the need to work together with all stakeholders to make sure that the REDS process is concluded in the best interest of all electricity distribution beneficiaries including industry and households.

Dipuo also acknowledged the difficulties to draw scarce technical skills to the rural municipalities.
According to a report, the total cost of the municipal electricity distribution infrastructure backlogs was R27 billion, this included R5 billion in bad debts due to the low consumer payment rate and related credit control problems.

"How are we going to deal with the estimated R27 billion," she questioned, warning that these were ticking time bombs, which needed combined efforts to consolidate municipal electricity undertakings so that they could maximise economies of scale and provide reliable electricity supply.

Dipuo also voiced her concerns regarding loss of power in Mthatha, Johannesburg and many other areas.

"These really have become so common that they are symptomatic of a deep-seated problem," she noted.

The municipalities were further reminded to respect the laws, following a number of reports by National Energy Regulator of South Africa (NERSA) that the regulatory provisions under the Electricity Regulation Act were undermined.

"I am sure that you will agree with me that the point of introducing laws is that they must be enforced! Surely there must be some normalisation of this situation, for the sake of the electricity user and our economy."

Last month, it was widely reported that some of the big metropolitan municipalities failed to settle their debt obligations to Eskom and water service authorities in time.

"If the big municipalities are battling, one wonders about the vulnerability of smaller municipalities and whether they could endure such problems," she said.

The minister was speaking at the Association of Municipal Electricity Undertakings Convention.