Ratepayers owe municipalities R76-billion in rates and taxes, including R12-billion in electricity fees, and this was hampering the refurbishment and rollout of electrical infrastructure, says Ongama Mahlawe, acting head of the Municipal Infrastructure Support Agency in the Department of Co-operative Governance and Traditional Affairs.

Mr Mahlawe made this comment yesterday during a joint public hearing of Parliament’s energy and local governance committees on the restructuring of the electricity distribution industry.

"We have a situation where R49-billion of that outstanding R76-billion is owed by households, although we don’t have a breakdown on what is owed for electricity bills between consumers and companies."

He also said municipalities often cut off households’ electricity when consumers were in arrears with the water bills. His comments, and others from Eskom and the National Energy Regulator of SA (Nersa), questioned the ability of municipalities to effectively handle electricity distribution. Their comments come just one day after the auditor-general reported that only 5% of the country’s 363 municipalities received clean audits.

Eskom’s group executive for distribution Ayanda Noah queried whether the country had the appetite for another round of restructuring of the electricity distribution sector, saying that almost 20 years of failure had left it at the same state it was in 1999.

Mr Mahlawe said that municipalities’ contribution to capital expenditure was now less than 50% of total capital spending.

He said municipalities needed to pay attention to the integrity of their billing information. Their services were generally underpriced and their tariffs needed to reflect the cost of providing a service. "We have instances where some municipalities were cutting off a consumer’s electricity for not having paid their water bills," he said.

Department of Energy chief director for electricity Thabang Audat said the Cabinet had cancelled the plan to create regional electricity distribution services in 2010, as it conflicted with some constitutional provisions regarding the services that municipalities were entitled to offer. However, he said that no alternative had yet been put in place to ensure that the backlog of infrastructure refurbishment and the rolling out of electrical connections were dealt with.

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