Another day, another municipal service crisis in the city. The news that Makana municipality was on a list of municipalities to be punished for not paying electricity surely made many of us wince, coming after signs that our constant water crises are, if not over, at least a bit less frequent.
Another day, another municipal service crisis in the city. The news that Makana municipality was on a list of municipalities to be punished for not paying electricity surely made many of us wince, coming after signs that our constant water crises are, if not over, at least a bit less frequent.
Makana is among 20 municipalities across the country singled out by Eskom for punished for non-payment of debt.
That Makana’s finances are in a mess is not news.
It owes Eskom R67 million. Since Makana’s profit from selling the electricity it buys at wholesale rates from Eskom is a major source of revenue, you would have thought it would ensure that it pays for this revenue generator.
But no. I posted my first reaction on Facebook:
How did it get to this?
Every month, a fair percentage of residents in Grahamstown and Alicedale pay their bills for rates and electricity.
Why has some of that money not been used to pay Eskom?
Who is responsible for this?
The councillors should now tell us why they did not prevent this mess. How is a world-class university supposed to operate, first without water and then without electricity?
This is not an issue of cross-subsidisation of the poor by the rich, or the extension of basic services to all residents rather than only white residents.
It's about non-payment, and the municipality not doing the basic job of paying its own bills while insisting that residents pay theirs.
Grocott's Mail reported earlier this month on the municipality's payment plan to avoid punitive cut-offs ('Makana's plan for Eskom – 2 April 2015).
The statement of a cut-off has been described as a “shot across the bows”, the habit of ships of old of firing a ball from a cannon just in front of a ship as a warning of an impending battle.
This follows an initial warning. In March, Treasury announced that it had “withheld the transfer of equitable share to 60 municipalities due to failure to honour their financial commitments in general and to pay Eskom and other service delivery creditors”.
Treasury then proceeded to do just that, and Makana was on the list of those 60 municipalities.
The equitable share is the part of the general tax money received by the government that is distributed to municipalities according to the number of residents.
Makana has satisfied Treasury that it will pay its creditors, so Treasury is releasing the around R20 million it still owes Makana, and Makana will then pay most of that to Eskom.
Province has promised to help Makana pay off the rest of the Eskom debt. So we have come close to having an even more unpleasant experience of electricity outages than usual.
In any case, as I write this, Eskom has announced, for today at least, a return to Stage 2 load-shedding from Stage 3 load-shedding countrywide.
Irony of ironies, in Parktown, Johannesburg the Nissan Leaf has gone on show to wealthy residents, a completely electric car with a range of under 200km at a price of almost half a million rand.
Those with money in that suburb must instead be contemplating buying petrol-fired generators or solar panels, if they haven’t done so already, to avoid sitting in the dark.
And this, as I have written before, is a form or privatisation of electricity generation.
For a long time Eskom has had a monopoly on generating electricity for resale, but it has never had a monopoly on people generating their own electricity.
What’s kept people from doing so until fairly recently is the cost and inconvenience, except in remote areas.
A government plan in the early 2000s to privatise part of Eskom to provide new capacity was shelved.
This meant Eskom lost four years of opportunity to build new plants.
A return to drastic privatisation may provide the electricity the country needs.
Meanwhile, independent power producers, particularly renewable energy plant are adding power to the grid, though this is a small percentage of the total generation.
Some citizens and businesses are not waiting for the government to sort out its policy and Eskom to sort out its problems.
MAN Truck & Bus South Africa is reported by Engineering News to have installed enough solar panels on the rooftop of its assembly plant in Durban not only to cope with load-shedding.
It is also a step towards freeing itself from reliance on Eskom power, instead being able to supply electricity to the grid.
MAN did this not to get off the grid.
The main drive is to serve the environmental goals of the parent company in Germany.
Yet it shows what companies can do, and if they were allowed easily to sell surplus power back to Eskom, might be persuaded to do.
