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Don't Worry About Load Shedding, Eskom Says It Has Enough Reserves To Keep Lights On Until 2021

And bad-debt municipalities get a breathing space to make new payment arrangements as Public Enterprises Minister Lynne Brown tells Eskom to wait until end of January before cutting them off.

24/01/2017 15:32 SAST | Updated 24/01/2017 19:33 SAST
REUTERS/Siphiwe Sibeko

Your lights will stay on as Eskom's now built enough generating power to cope until 2021 and the minister has intervened to keep the lights on in those towns where the bills haven't been paid.

During a media briefing in Johannesburg on Tuesday to announce its quarterly system status update, Eskom's interim group chief executive officer Matshela Koko said the state-owned power utility has turned the corner from the days of load shedding to having improved energy availability.

Koko said energy availability has improved from 70.3 percent at the end of the third quarter to 77.3 percent, which was a result of 3,103 megawatts being added to the national grid. That means Eskom expects to be able to deal with any power demand until 2021.

"In the next six years, Eskom will add a further 9,103MW capacity through the new-build programme. Peak reduction due to demand side management (DSM) is 123MW against a target of 100MW. Eskom can meet any increase in demand until 2021 due to operational surplus capacity which currently averages 5 600MW at peak this financial year," said Koko.

He said the operational surplus of 5,600MW is a game changer for the power utility. With the surplus, Eskom has seen a low number of interruptions in transmissions and an increase in the number of people being connected to the grid.

Koko said in the past nine months, the power utility managed to connect 162,104 new customers to the grid with a further 150,747 of them now energised and using electricity. The good news comes on the backdrop of Eskom's announcement that it would be cutting power to municipalities that have been defaulting on their debt.

Municipalities in the Free State, North West, Northern Cape, Eastern Cape and Mpumalanga owe Eskom billions of rand in unpaid electricity bills. Eskom has implemented timed power cuts on those municipalities, leaving their consumers in the dark, as it tries to recover outstanding debt. That resulted in payment plans being made and settlement agreements signed, binding the municipalities to settle the debt.

In another major initiative to safeguarding the cash flow, Eskom is rolling out prepaid meters to force more consumers to pay upfront. Despite more people being on the grid and municipalities having more clients, Koko said the utility would not write off any debt.

Public Enterprises Minister Lynne Brown has thrown the defaulting municipalities a lifeline by asking Eskom to put the power cuts on hold so consumers aren't left in the dark while the utility collects the debts.

"I have requested Eskom to delay implementing power interruptions until the end of the month to give municipalities a few more days to make agreed payments and avoid negative impacts on local customers and the economy," she said.

Koko confirmed that they would allow municipalities until the end of January to settle arrears.

"No Eskom debt shall be written off, as it is in contravention of the Public Finance Management Act. All debts will have to be paid by all municipalities. Eskom and municipalities will jointly investigate solutions that will be tailored for the needs of each municipality," he said.

That will include installing prepaid meters to municipal customers, revenue collection services at the municipalities and active partnering with specific municipalities.

Despite the breathing space for municipalities, Brown said she has thrown her weight behind Eskom's debt recovery strategy, emphasising the importance of being able to honour obligations, and saying that this strategy was now starting to yield results.

"I wish to stress my support for Eskom's debt recovery strategy which so far has yielded positive results. It is critical that Eskom recovers all its revenue to be able to honour its obligations to creditors in order to remain sustainable," she said.

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