Nelson Mandela Bay loses staggering R1 billion in electricity revenue

Nelson Mandela Bay has lost more than R1bn in revenue to electrical theft and technical losses over the past three years. 

The shocking figure was revealed by  co-operative governance MEC Xolile Nqatha, who was responding to parliamentary questions tabled by DA MPL Vicky Knoetze.

Knoetze had asked questions about electricity tariffs charged by municipalities and regulated by the National Energy Regulator of SA.

Nqatha said the figure included February this year.

According to Nqatha’s response, non-technical losses made up nearly two-thirds of the loss, totalling more than R634-million, while technical losses accounted for more than R406-million in the past three financial years.

The non-technical loss was a result of  energy being dissipated by equipment such as conductors and distribution lines.

The metro’s ratepayers could bear the brunt from July 1 if proposed electricity, water, refuse and property hikes are approved. 

The municipality wants electricity tariffs to go up 6.22%, water, sanitation and refuse rates 8% and property rates 8.5%.

It has come under fire from political parties, including the DA and the Patriotic Alliance, for “milking consumers” already under financial stress as a result of the nationwide lockdown.

Municipal spokesperson Mamela Ndamase said the city lost about R350m a year to electricity theft and technical losses.

She said the city had adopted various strategies to control the issue.

These included:

• An investment of more than R60m by the electricity and energy directorate to provide safe electricity to informal areas in an effort to replace illegal connections. To date, Ndamase said, more than 3,000 illegal connections had been replaced with safe connections;
• The appointment of six service providers in six Bay clusters to inspect faulty meters, meter tampering and for the removal of illegal connections.Two other service providers had been appointed to inspect and certify metering instruments to all industrial and commercial consumers; and
• A R288m grant to upgrade the metro’s network and replace non-efficient distribution systems to curb technical losses.

“We are going on tender soon to procure an integrated smart metering management solution to detect meter tampering remotely and avoid physical inspection.”

The system will include GPS, smart metering and bulk meters.

“We want to detect meter tampering in real time.

“If you bypass a meter, an alert will be sent out with the address and that will allow us to switch the user off remotely as well,” Ndamase said. 

Ndamase said the municipality had migrated about 50% of commercial meters to the automated meter solution system.

On Thursday, the DA’s Knoetze said while technical losses were inevitable, the losses experienced by the metro could be considered excessive and could point to poor maintenance.

“Technical losses can be reduced by ensuring regular inspections and continuous maintenance of electricity infrastructure as well as by supplying high-energy consumers directly from feeders.

“The Nelson Mandela Bay municipality must ensure that a programme is in place to regularly inspect, maintain and repair electricity infrastructure and ensure innovative measures are taken to prevent technical losses,” Knoetze said.

“Just imagine what the city could have done with the R1bn in revenue that was lost.”

She called for the municipality to put in place a strategy that included a detailed plan of the inspection, maintenance, replacement and upgrade of existing electricity infrastructure — which is up to 40 years old in parts of the metro.

To achieve this, the party called for:

• The use of alternative energy solutions such as solar and wind power, especially in the effort to connect informal users;

• The use of spiderweb connections (one pole with four users connected, which included meters);

• Metered connections in informal areas;

• The rollout of tamper-proof meters; and

• An amnesty period for users with meters that had been tampered with.