Electricity theft
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This week, Metering.com takes an in-depth look at electricity theft in South Africa.We discuss the various types of electricity theft as well as some of the factors driving consumers to engage in illegal use of electricity and energy services.

The South African energy landscape has recently witnessed a number of announcements, some of the increases and some of the decreases on electricity theft.

Electricity theft and revenue collection

According to the Ridge Times, South Africa is facing six forms of electricity theft resulting in an average loss of up to R20 billion ($1.5 billion) per annum.

The local publication states that bypassing of electric meters and consumers, mainly in informal settlements, illegally connecting themselves to the national grid are the two types of electricity theft most common in South Africa.

Vandalism of utility infrastructure, cable theft, the removal of oil from substations, the selling and use of illegal prepaid vouchers and non-payment of electricity tariffs are some of the factors characterised as electricity theft.

Whilst Eskom has saved R1.4 billion ($109,000) in revenue by reducing electricity theft from 7,12% to 6,43% between 2013 and 2017, the MoneyWeb reported that some municipalities reselling energy provided by the utility are still struggling with increases in non-revenue electricity.

For instance, Pretoria has in the 2015-2016 financial year recorded an increase in non-revenue electricity by 56% compared to the previous year.

At the same time, according to the Herald Live, one in every seven houses in the Nelson Mandela Bay in Port Elizabeth has its electric meter tampered with, to result in an increase in non-revenue expenses.

On the other hand, the city of Johannesburg has managed to reduce energy theft from 29.2% during the same period due to factors such as the installation of prepaid meters.

City Power, the utility arm of the city of Johannesburg claims regular audits to consumer consumption patterns and meters led to the identification and replacement of a number of faulty meters inaccurately measuring usage data within its distribution network.

The smart prepaid electricity metering system has the ability to provide Eskom and City Power with notifications in the event of users tampering with their energy meters. According to the Star, the prepaid electric metering infrastructure would help Eskom recover R8 billion in arrears owed by municipal and individual consumers.

Prepaid meters and debt recovery

However, the use of prepaid meters and the manner in which Eskom is using the technology to recover its debts has received criticism from consumers.

Last week, consumers in Imbali township in Pietermaritzburg in KwaZulu-Natal protested against Eskom directing 40% of points within prepaid vouchers bought by consumers towards their energy credits.

“I use R1 900 a month for electricity and I’m unemployed. Before I used to buy R100 electricity and get 72,5kw but with the new system I only get 40kw,” said one of the consumers interviewed by News24.

The introduction of hot lines which consumers use to report incidents such meter tampering is one of the measures the city of Johannesburg and Eskom claim helped drive a reduction in electricity theft.

The implementation of Operation Khanyisa by Eskom has also helped increase consumer awareness on the dangers of illegally connecting themselves to the utility’s grid network as well as bypassing their meters.

Through the programme, a number of arrests on perpetrators have been made, and the utility has also campaigned for the implementation of heavy penalties on those found guilty of crimes on energy theft.

For instance, last week, a 60-year-old Gauteng woman was sentenced to 18 years in prison for leading a group illegally connecting consumers on Eskom’s grid and selling stolen prepaid electricity vouchers.

Despite recording a huge decrease in energy theft, Khulu Phasiwe, the spokesperson for Eskom told the Cape Argus, that the utility still faces “massive bypassing of meters and sabotaging of meters.”

The situation is said to be negatively impacting on the operations of a number of municipalities such that they are failing to raise enough funds required for the maintenance of their distribution systems.

Energy tariffs

This, in turn, has forced both Eskom and municipalities to approach energy regulator NERSA with proposals to hike their energy tariffs.

But how will increasing energy tariffs help in the reduction of energy theft yet the inability of consumers to pay their bills due to the high costs of electricity has been identified as one of the factors driving them to illegally connect to the grid and bypass their meters.

The majority of municipalities in South Africa submitted proposals to increase energy tariffs by more than 2% which is NERSA’s recommended tariff hike. Some even proposed tariff increase by up to 20% of their current costs of electricity for business consumers. [South Africa approves utility energy tariff increase].

According to the Citizen, in a confidential draft tariff application submitted this June to the National Treasury, Eskom proposes to increase its tariffs for the 2018/19 financial year by 19.9% for residential customers whilst municipalities will pay 27.3% more for bulk electricity purchases as from April and July 2018 respectively.

Msukaligwa municipality in Mpumalanga province plans to implement a three-year fine to consumers found tampering with meters before reconnecting them back to its services.

Although Eskom claims energy theft has resulted in its grid network being overloaded, the state utility has managed to sustain its 21-month track record without power shedding.

 

Image Credit: 123rf