The municipalities want to take over all Eskom customers



As the South African Local Government Association (Salga) goes to court to take over all power distribution in Mzansi, farmers called on municipalities to stay on track and focus on improving their existing basic services.

Salga filed an application with the High Court in Pretoria for a declaratory order that would give municipalities the exclusive right to administer, distribute and sell electricity throughout South Africa. If successful, around 78,500 agricultural customers, who currently receive their electricity directly from Eskom, will become municipal customers.

Salga says in the request that there is a “fundamental problem” of having a dual electricity distribution system in a country covered by wall-to-wall municipalities: eight subways, 44 districts and 205 local municipalities.

One of its main arguments is that municipalities are losing electricity revenue which ultimately subsidizes other basic municipal services.

“When Eskom distributes electricity within the limits of a municipality, it does not pay a single cent to that municipality.

Application to the court of Salga

“On the other hand, when a municipality distributes electricity, it buys it wholesale from Eskom, adds a markup (subject to NERSA tariffs) and sells the electricity to customers. The total income that municipalities gave up in 2019 for example … is 162.36 billion rand. “

Salga further states that the current system creates credit control problems for municipalities, which cannot cut off electricity to “encourage” customers to pay their bills, and “discriminate against customers because customers of Eskom often pay less for electricity than their counterparts who receive electricity from municipalities ”.

Service Provision Agreements to Authorize Surcharges

Salga is now asking the court to order Eskom to enter into service delivery agreements with municipalities – an issue she says has never been successfully negotiated since 2013.

“Electricity will be… In this relationship, Eskom would at the very least be paid for the wholesale supply of electricity, as it would when it supplies wholesale electricity to municipalities.

“Since Eskom would be a service provider for municipalities under the SDAs, municipalities could then apply surcharges when electricity is cross-linked and also exercise credit control by cutting off, for example, electricity for residents who do not pay for other services… Obviously, SDAs create a win-win situation for municipalities and Eskom.

Application to the court of Salga

But where does it leave consumers? Farmers tell Food For Mzansi they are not convinced that municipalities, which are failing across the country, should ultimately be responsible for all electricity distribution. This also raises the question of cost.

“They just want to make money”

Sehularo Sehularo, coordinator of the Northern Cape farmers’ organization Saamtrek Saamwerk, says it is “more of the devil you know” – even though Eskom has its challenges, municipalities are not ideal candidates to take over the administration of electricity supply from the power company.

“Their electricity is just too expensive. They just want to generate money by providing us with electricity.

Coordinator of Saamtrek Saamwerk Sehularo Sehularo

He is further concerned about Mzansi’s track record in municipal jurisdiction. “We don’t trust municipalities to provide us with reliable electricity. They have no capacity. We know that our municipalities do not have engineers. They fail to provide drinking water and infrastructure. Most of our farmers fail to operate their businesses due to poor service delivery. Most of our farmers in areas like Jan Kempdorp, even here in Kimberley, do not have clean drinking water. These are the foundations of municipalities, ”says Sehularo.

“The economy is already contracting because of power cuts. What will happen when another incompetent service provider takes over? I think so [municipalities] end up having these exclusive rights, our problems are just beginning. As a farming community in our area, we prefer to stick to Eskom.

A wasteland of wilted spinach on Rabelani Nemanilwe’s farm, after a 48-hour power failure by Eskom. Photo: Fourni / Rabelani Nemamilwe

Rabelani Nemanilwe from Mooinooi in Rustenburg says municipalities need to tidy up their homes before they take on the huge responsibility of providing electricity to everyone in Mzansi. Nemanilwe receives electricity directly from Eskom and lost an entire crop of spinach in a 48-hour power cut earlier this year. His inability to irrigate and save his crops resulted in job losses on his farm and an investment of more than R50,000 lost.

He thinks it would be better for farmers to have an alternative supply of electricity – a supply completely independent from the state.

Municipalities are already struggling to pay Eskom

Christo van der Rheede of Agri SA said that if Salga was successful it would lead to increased electricity tariffs and an often unreliable electricity supply, which would be devastating for many farmers.

“The biggest challenge remains the inability of many municipalities to pay their debt to Eskom to honor their contractual financial agreements with Eskom, to ensure a constant and affordable supply of electricity to paying customers and to maintain the local electricity infrastructure. “

He says that as long as these problems persist, many municipalities cannot be trusted to be the sole suppliers of electricity.

Francois Wilken, president of Free State Agriculture, said they will do everything in their power to prevent the app from succeeding as food security depends on agriculture, for which a municipal takeover would be devastating.

“If we look at what the capacity of the municipalities is in terms of service delivery and how billions of rand is already owed to Eskom through the municipalities, it seems to me that their goal with all this app is to try to compensate for the losses. losses they already have, with profits from electricity sales.

François Wilken, President of Agriculture of the Free State

Wilken says farmers can’t wait days and weeks for the power to turn on when the harvest is at a critical stage. “The municipalities [have poor] service delivery history and ability to maintain their own infrastructure. How are they going to maintain the electrical networks after working hours and also on weekends? We are very concerned and will do everything in our power to prevent this from happening. “

READ ALSO: Farmers have “lost all confidence” in municipalities

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