Smart metering programmes have delivered a 26% increase in municipal revenue and achieved 96% payment compliance in participating municipalities, according to the Department of Cooperative Governance and Traditional Affairs.
Presenting to a joint meeting of Parliament’s Portfolio Committees on Electricity and Energy and Cooperative Governance and Traditional Affairs on June 3, the department said structured smart metering and revenue recovery programmes are producing measurable improvements in municipal electricity finances.
Executive Engineering Technologist & Strategic Infrastructure Leader and Head: Results Management Office at COGTA, Sicelo Xulu, said municipalities are owed approximately R467 billion by customers with a significant portion of the debt more than 90 days overdue.
“We’re trapped in a cycle where there’s no collection from consumers and, as a result, we cannot pay,” he said.
According to Xulu, smart metering has proven effective in improving revenue collection and payment compliance. He said municipalities participating in structured smart metering programmes have achieved a 26% uplift in revenue while payment compliance has reached 96%.
The department said smart metering is part of a broader strategy to improve municipal financial sustainability and address growing debt owed to Eskom, which was approximately R111 billion at the end of March.
The department also proposed that municipalities make greater use of distributed energy generation to reduce electricity costs.
Under one of the department’s proposed intervention pathways, municipalities could use distributed generation for peak shaving during periods of high demand, reducing bulk electricity purchases from Eskom and improving their ability to meet financial obligations.
Xulu said municipalities with structural tariff and customer profile challenges will continue to struggle financially regardless of revenue collection interventions.
“The municipality must be able to harness some of the power from distributed energy generation at a certain time of the day so that there can be peak shaving and therefore save in terms of bulk purchases.”
Electricity and Energy Minister Kgosientsho Ramokgopa cautioned against viewing distribution agency agreements (DAAs) as a quick solution to municipal debt and distribution challenges. “The DAA won’t give you answers in the next 12 or 24 months. It’s a deliberate, structured problem that requires patience,” he said.
Ramokgopa argued that the issue extends beyond Eskom debt, describing it as a broader challenge related to the financial sustainability of local government.
Eskom Acting Group Executive for Distribution Agnes Mlambo said only 11 of the 71 municipalities participating in the debt relief programme have remained compliant with its requirements. Municipalities meeting the programme’s conditions are currently achieving payment levels of 94%, she added.
Mlambo said DAAs are intended to strengthen municipal electricity operations, improve billing and revenue collection and address service delivery challenges rather than serve as a permanent solution.
