Questions in parliament regarding revenue protection issues

Two questions were recently asked in Parliament to the Minister of Energy regarding Revenue Protection issues. Both times the answers contained figures obtained only from Eskom and assumptions made regarding Municipalities. We should ask ourselves the question, why does this happen. Is it because the Minister gets no replies regarding questions from the other Utilities in South Africa, or are the relevant officials just taking the “easy route” out by using Eskoms information?

As many persons would maybe not agree with these answers, I would hereby like to ask members to post their opinions in the Linkedin SARPA group page, or send an email to me, so that I can post it there for discussion by the group members.

Hereby the one of the questions that was asked and the response: Rens Bindeman

Question asked in Parliament to the Minister of Energy:
How much electricity is lost to Eskom and/or municipalities as a result of theft, (b) what is the rand value of this loss and (c) what is the extent of this loss to Eskom’s and municipalities’ finances?
NW746E

Response
In 2008/9 financial year Eskom sales amounted to 214 850 GWh. The total losses (technical and non-technical) amounted to 11 706 GWh. The assumption is that this figure includes 33.3% to 50% of non-technical losses in the form of theft. That implies theft losses range from 4 100 GWh to 5 850 GWh.

a) Assuming that most of the losses take place amongst residential customers who buy electricity at an average of 62c/kWh then the financial implications are from R2.5 billion to R3.6 billion per annum. It is estimated that the municipalities lose the same amount of energy.

b) However, if these illegal connections were legal, they would have qualified for Free Basic Electricity. Should each connection be using the average of 180 kWh per month, it means the Free Basic Electricity would have reduced the losses to around 72% of the above values, and thus the loss would be reduced to R1.8 billion to R2.6 billion per year. With Eskom and Municipal supplies combined, and taking into account the impact of FBE, the financial value amounts to R4.4bn of lost revenue due to electricity theft.

c) This would be more than 5% of turnover, indicating the seriousness of the problem.