South Africa

STATE OF THE CITY

Joburg mayor’s electricity plan criticised as ‘premature and naive’

A pylon tower carries electrical power lines over residential shacks, some equipped with solar power geysers on their roofs, in the Alexandra township outside Johannesburg, South Africa, on Thursday, Oct. 6, 2016. Eskom Holdings SOC Ltd. is building new electricity stations to end the power cuts that were imposed for about 100 days last year, curbing growth in Africa's most-industrialized nation. (Photo: Waldo Swiegers/Bloomberg via Getty Images)

As many Johannesburg residents continue to experience rolling power cuts Mayor Geoff Makhubo has announced he wants City Power to take over electricity provision for the whole city. There are more questions than answers to the mayor’s plan, particularly, whether it will benefit residents.

In February 2020, two months after he was elected, Johannesburg Mayor Geoff Makhubo marched with Soweto residents to Eskom’s Diepkloof offices. He said electricity was a right rather than a privilege and the power utility should provide reliable electricity and limit load shedding.

Eskom, rather than the municipality’s City Power, still provides electricity to large parts of Johannesburg, including areas in Soweto, Ivory Park, Orange Farm as well as parts of Sunninghill, Sandton and Bryanston.

Some of those areas have experienced rolling power outages over the last year, either due to Eskom’s “load reduction” programme or damage to infrastructure. That situation might soon change, but it’s unclear how it will affect residents.

In his State of the City Address on Tuesday, Makhubo said the City was in talks with Eskom for City Power, which provides electricity to the majority of Johannesburg, to take over the provision of electricity in areas such as Soweto, Orange Farm and Ivory Park.

“Our negotiations with Eskom is wall-to-wall, so the entirety of Johannesburg is with us,” Makhubo told 702 on Wednesday morning.

“We’re negotiating with Eskom to get the Eskom supply areas into the city. The negotiations are ongoing so we’re still working with National Treasury, Cogta national, national department of enterprises, Eskom itself, but the task teams are hard at work,” he said.

Eskom provides electricity to a number of Johannesburg townships, where infrastructure is often overloaded due to illegal connections while non-payment by consumers has contributed to the SOE’s hefty debt.

In 2020, Eskom was reported to have written off R8-billion in debt from Soweto residents, leaving unpaid bills in the area still standing at R12.8-billion.

Through its load reduction programme, Eskom has essentially decided that it cannot afford to continue repairing transformers and substations in areas across the country with a high prevalence of illegal connections and low payment rates.

The question is, could City Power either improve on maintaining infrastructure or collecting electricity payments?

“We think that we’ll get into a different social compact. We are politically responsible for those areas anyway. We supply water, roads and housing [in those areas],” Makhubo told 702.

He claimed that an increased level of residents in Eskom-serviced areas are paying for services such as water and signing up to have prepaid meters installed. He also suggested he and the ANC’s political activism would encourage residents to form a new relationship with City Power.

“I’ve been in the belly of the beast. I’ve been in communities when Eskom and communities have been in conflict. I’ve been in White City. I’ve been in Chiawelo, you know, engaging, mediating, getting communities to agree to split metering. Many of the communities are starting to buy electricity,” said Makhubo.

DA Johannesburg caucus leader Leah Knott said the council was informed of the plan to incorporate Eskom-serviced areas into the City in its last meeting. She noted that Makhubo, while marching in February 2020, had demanded residents serviced by Eskom should pay a R150 monthly flat rate for electricity.

On Wednesday, Makhubo said City Power would charge residents according to their usage rather than a flat rate.

“Making a statement such as this without having conducted a proper feasibility study and discussing the terms with Eskom is not only premature but exceptionally naïve. Such an endeavour could essentially bankrupt the City within a matter of months and needs a comprehensive and workable strategy,” said Knott.

Knott posed a number of questions: “One, will Eskom contribute to the bulk infrastructure the City requires in order to manage this? Two, how will the backdated debt owing to Eskom be managed? Three, how will the City increase collection from Eskom supplied areas which currently sit at 25% and below?”

The Soweto Electricity Crisis Committee’s Trevor Ngwane, who has repeatedly called on Eskom and the government to find a solution that doesn’t continue to punish the poor, said, “I have no problem with City Power taking over but the mayor needs to put proposals on the table [to explain] how this will make things better, including a reflection on how City Power is doing and how he is working to solve its problems, viz poor billing, the poor paying more for electricity relative to the rich, etc.”

Makhubo’s plan appears to be in its nascent stages. In March 2021, an official in the City’s department of environment and infrastructure services said City Power should take over Eskom-serviced areas, but, otherwise, there has been little public talk about the idea from the mayor or his team.

Eskom spokesperson Sikonathi Mantshantsha told Daily Maverick, “I am not aware of any talks for City Power to take over Eskom areas at present. But for that to happen there would need to be an application to Nersa (National Energy Regulator of South Africa) to move the distribution licence to the new operator, and that involves an exhaustive public participation process in which the customers affected get to participate.”

Johannesburg’s draft Integrated Development Plan (IDP) for 2021-26 appears to make no mention of Makhubo’s proposal. It does, however, raise concerns about City Power’s ability to improve on Eskom’s position.

The IDP says City Power, which accounts for 10% of Johannesburg’s total capital expenditure, was formed to generate surplus revenue for the City but it went from having a bank balance of over R350-million in 2015/16 to a deficit of R4.2-billion in 2018/19. During the same period, electricity losses had risen from 22% to 25%, driven by non-technical issues.

“The biggest drivers of non-technical losses are theft of electricity, illegal de-calibration of electricity meters, damaged meters, faulty voltage and consumers receiving electricity without being connected to specific meters,” reads the IDP.

Makhubo claims City Power’s struggles were caused by the DA-led administration, which governed the City from 2016 to 2019, but he’s yet to explain how expanding City Power’s responsibilities will help save Joburg’s struggling energy provider or what City Power will do differently to ensure residents will receive a reliable and affordable power supply. DM

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 3

  • How does Eskom tariffs compare to JHB tariffs?

    On average councils mark up their Megaflex municipal tariff from Eskom by about 70% but not sure how Eskom Residential compares to JHB Residential.

  • Eskom has put a lot of effort and money into Soweto to try to improve payment levels, with limited success- payment levels improved from 16 to 23%, last I heard. It’s difficult to imagine how City Power will be able to better this. There is a risk of a fiscal black hole if they are not careful.

  • Please peer review 3 community comments before your comment can be posted