Electricty losses attributed to theft
Price hikes and the weak economy are likely to lead to people dodging their bills, says the City of Cape Town.
|||Cape Town - The tough economic climate and an expected electricity tariff hike in the region of 10 percent from July, is likely to lead to more residents dodging their bills and more illegal connections, says the city council.
“Every time the economy is under pressure, more people turn to theft rather than paying for electricity,” the council’s electricity director, Les Rencontre, told the council’s portfolio committee on utility services on Monday.
The council lost more than R140 million in the last financial year as a result of technical losses and theft, but has since managed to recoup around R100m.
The council sets 9.3 percent as its target for electricity losses, but over the past year, this crept up to almost 12 percent.
In February last year, the council’s total electricity losses were around 10.76 percent, exceeding 11 percent during the winter months of June and July.
At least 6 percent of the losses are attributed to theft from the council’s distribution network, either through illegal connections or bypassing the system. The remainder of the losses are technical in nature, and largely unavoidable.
Administrative losses as a result of the billing system are also taken into account.
The DA’s Clive Justus said he was concerned about the effect of the ongoing losses to the council: “It is anticipated that non-technical losses will increase further and that we should mitigate the theft in light of the Nersa (National Energy Regulator of SA) increase,” said Justus.
Nersa granted Eskom a 9.4 percent increase in the price of bulk electricity for this financial year, and on Tuesday the national energy regulator is expected to brief the National Assembly’s energy committee on its decision to grant Eskom a 9.4 percent increase for 2016/17.
Eskom had asked for a 16 percent increase.
Mayoral committee member for utility services Ernest Sonnenberg played his cards close to his chest when asked by the committee what he expected the tariff hike to be for this year.
“We are busy drafting some proposals, but we can expect tweaks and changes until the day it goes for printing,” he said.
The council will present its tariff hikes when the 2016/17 draft budget is tabled on March 31. It’s largely expected that the council will pass the Eskom increase directly on to consumers.
It would also most likely want to recoup so-called claw-back costs given that Eskom’s increase will take effect on April 1, while the city council’s tariff increase will only take effect on July 1.
The council’s utility services portfolio committee on Monday noted that, in light of the Eskom increase, Treasury had also adjusted its expected average electricity losses for municipalities to between 10 and 12 percent.
“I’m just concerned that we are sending the message that it’s okay to steal,” said Justus.
Rencontre said the council had measures in place to mitigate theft from its system.
This included sending more technical teams into the field, recruiting more artisans and using new technology to identify theft from the system.
Justus said while it was the tendency to closely monitor informal settlements for illegal electricity connections, these only accounted for around 3 percent of the losses, and it was large consumers who had to be more closely monitored.
lindsay.dentlinger@inl.co.za
Cape Argus