Municipalities’ R78 billion debt to Eskom must be urgently addressed to protect the power utility’s ability to fulfil its mandate.

This is according to Minister of Electricity and Energy, Kgosientsho Ramokgopa, who addressed the media on Monday, July 9.

“A lot of this is irrecoverable. There’s no possibility under the sun that we will collect that R78bn. It’s important we resolve this,” he said.

Eskom requires the funds to reinvest in its infrastructure, but Municipalities, who are obligated to pay the outstanding debt, lack the means to do so.

Ramokgopa added that the current debt owed to Eskom could jeopardise the power utility’s future. “Our projection suggests that by 2050, Eskom will be owed R3,1 trillion at the current rate, leading to its collapse and compromised generation capacity.

“This is our most urgent task. It is municipality-related, and we can’t stand by. We must provide technical assistance,” he said.

Load reduction

Continued non-payment affects Eskom’s ability to address its distribution infrastructure needs, leading to the implementation of load reduction, Ramokgopa said. Load reduction occurs in areas where demand exceeds infrastructure capacity.

“We need to protect Eskom’s interests as a going concern, ensure that municipalities can collect revenue, and also protect the interests of the consumers. When distribution infrastructure fails and stops providing electricity to 50 houses, there are 10, 20 houses that have been paying their bills faithfully but will be adversely affected as well,” he said.

Tariff review

The minister said the department would work with municipal authorities to tackle the challenge of electricity affordability and access, ensuring municipalities could collect revenue.

“We need to review electricity tariff models to make it more affordable and accessible for everyone. It is a top priority for us.

“Distribution is our albatross. We are on a road to self-destruction and the casualties are the poor. It can’t continue,” Ramokgopa said.