We are working hard to resolve Eskom’s R78bn municipal debt crisis, says Ramokgopa

ELECTRICITY and Energy Minister Kgosientsho Ramokgopa says that his ministry is working hard with the South African Local Government Association (Salga) to resolve Eskom’s mounting R78 billion municipal debt problem.

“The municipalities owe Eskom R78bn, but in turn the municipalities are owed R349bn. The government and businesses need to pay their debt to the municipalities, so that they in turn can service their debt to Eskom,” Ramokgopa said.

“We, together with Salga, will target two municipalities per province for an innovative solution to address this problem. This will stress test the solution, so that we can then roll it out to other municipalities.”

At his regular media briefing on Monday, Ramokgopa also praised the exceptional performance on the generation side of Eskom as the system had been running more than 137 days without load shedding. The last day that Eskom implemented load shedding was on March 26 for five hours.

Ramokgopa highlighted the progress at three power stations, namely Kriel, Kendal and Tutuka, in reducing the unplanned outages. Two of these three stations have female power station managers.

“Kriel has reduced its unplanned outage from 1,400MW to 508MW; Kendal from 2,500MW to 919MW and Tutuka from 2,400MW to 949MW. This progress shows how important it is to get the right people in place. It also shows the exceptional competence of the Eskom leadership,” he added.

Ramokgopa said unplanned outages of the generation units averaged 10,508MW during the past 7 days compared with 15,605MW in the corresponding week last year.

The improvement in plant performance was reflected in the Energy Availability Factor (EAF) which was at 70.49% in week 30 of 2024, compared with only 49.99% in week 15 of 2023. He said the improvement was also reflected in the drop of the share of non-Eskom generation in total generation to 12.2% in May from 14.8% in February.

Eskom will welcome additional generating capacity before the end of the year, he added: “We are expecting Medupi Unit 4 to give us 800MW as well as Kusile Unit 6, which is another 800MW. We are hoping to get an extension of life for Koeberg Unit 2 and that will give us an additional 980MW.”

The improvement in plant performance allowed Eskom to boost its power exports by 32.6% year-on-year in June to 1,130 Gigawatt-hours with countries such as eSwatini, Lesotho, Namibia, Zambia and Zimbabwe benefiting.

Ramokgopa noted that despite the National Treasury making significant annual contributions to municipalities for the purpose of Free Basic Electricity (FBE), the distribution of these subsidies to vulnerable households was not prioritised.

In 2019, 10 million households were funded by the national budget to receive FBE; however, only 2 million received the subsidy. Ramokgopa said among the reasons for this disparity included low indigent household registration with municipalities for FBE.

In addition, he noted that electricity consumption levels had changed significantly since the 50 kiloWatthours (kWh) monthly allocation was determined in 2005. The current allocation was insufficient, and warranted a review, tied into off-grid solutions.

Ramokgopa welcomed the division of Eskom into three separate entities, namely generation, transmission and distribution. “The separation should allow us to see if there are any hidden inefficiencies as the more than 400% increase in electricity tariffs over the past decade is clearly unsustainable. That is why we are seeing a proliferation in illegal connections or bypassing (of) meters, so non-technical losses have surged. Illegal connections will not be tolerated,” he warned.

– BUSINESS REPORT