Local power a ‘time bomb’

Johannesburg – There is a backlog of about R28bn worth in maintenance and restoration of the country’s electricity distribution infrastructure, and this backlog is increasing by about R2.5bn every year.

It’s a time bomb waiting to explode, said Phindile Nzimande, chief executive of EDI Holdings, Eskom’s subsidiary that has to manage the restructuring of the country’s electricity distribution, at an energy conference on Thursday.

The backlog in maintenance work was disclosed by Ronald Chauke, National Treasury’s director for energy and telecommunications.

The EDI said R28bn was  was needed to bring the country’s distribution assets up to an acceptable standard. If these assets were not reliable, delivery of safe electricity would be seriously compromised, said Chauke at a South African National Energy Association (Sanea) conference.

At the policy level treasury and the Department of Energy were drawing up a plan for cabinet.

Nzimande said the backlog had arisen because municipal authorities, which should spend 10% of their income from energy tariffs on maintaining distribution infrastructure, have simply neglected to do so.

Every year the shortfall was increasing by R2.5bn, she said. In her view there was no legal way to force the 187 municipalities that were licensed as electricity distributors to do the maintenance work.

This was partly because the delimitation of the powers of local authorities made this impossible, and partly because the system of regional electricity distribution companies, previously known as Reds, had failed.

The constitution entrenched municipalities’ rights to distribute and sell electricity within their jurisdiction.

The nine Reds were to have been established by connecting Eskom’s distribution network and that of the municipalities into regional organisations. This had never happened because certain municipalities had refused to surrender their distribution assets without compensation.

Mbulelo Ncetezo, executive manager at the National Electricity Regulator (Nersa), said Nersa could fine municipalities that failed to do the compulsory infrastructural maintenance.

He said that Nersa could impose fines of up to R2m a day for every day that maintenance was overdue. The reality was, though, that local authorities that were behind in their maintenance work did not have money to do it. Fines would make it even more difficult to perform the work.

According to him, setting up the Reds was a possible solution.

For Nersa it was a problem to supervise 187 electricity distributors. At some of these municipalities the electricity department consisted of a single person, he said.

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