Is the current municipal service delivery model contributing to increased standards of living, reduced poverty and greater equality? SA power and energy expert Vally Padayachee responds.
It is generally accepted that a municipality’s core purpose with respect to electricity service delivery is to ensure access by its end use customers to reliable, safe and resilient electricity supply, and to provide this electricity effectively and efficiently and at a price that is cost-reflective while taking into account equity (access and affordability) for poor people. The municipalities in so doing need to be financially viable, capable and sustainable. Success in these aspects must and should promote and support social, environmental, and economic development.
Ironically, most of the municipalities benefitted financially from Eskom’s increases in electricity prices. These increased prices now pose a potential threat to the business model of municipal electricity distributors ie. via loss of sales to their top-end customers and an ever increasing cross-subsidy burden, and therefore to the economic sustainability of municipalities noting their huge dependence on, among others, electricity revenues.
The South African government needs to address this anomaly as a matter of priority. Currently many municipalities are cash strapped and almost bankrupt. Many are fighting to survive, and many are immensely indebted to Eskom, reflecting significant revenue and cash collection issues. Their non-technical losses have also gone through the roof in many cases.
According to the book A Question of Power – Electricity and the Wealth of Nations by Robert Bryce electricity has transformed humanity like no other forms of energy. Since the dawn of the Electric Age less than 140 years ago, electricity has changed how we live, communicate, learn and eat. In doing so, it has fuelled an unprecedented period of human flourishing. Never in human history have so many people lived in such wealth and prosperity. And electricity continues to change and enrich our lives. From our ability to navigate foreign cities with maps on our iPhones to the staggering quantities of information available to us on the internet, we use electricity without a second thought and nearly every technology we use requires reliable flows of electricity.
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