Enoch Mgijima Losing R21m–R23.5m Monthly on Electricity, Annual Report Shows

Enoch Mgijima Local Municipality is currently losing between R21 million and R23.5 million per month in electricity revenue, according to its officially tabled 2024/2025 Annual Report.

The disclosure appears in ITEM 1/2026 Annual Report (page 80), under the Electricity Management section.

Only 65% Collected from Prepaid Customers

The report states that the municipality collects only 65% of its electricity revenue from prepaid customers, who account for approximately 95% of electricity users in the municipality.

According to the document:

• The municipality receives an average of R7.4 million per month from a prepaid electricity budget of R28 million.

• In contrast, conventional (postpaid) customers generate approximately R17.8 million per month out of a R19 million monthly budget.

The report indicates that the shortfall in prepaid revenue is the primary contributor to the monthly electricity losses.

Break-Even Point Not Being Reached

The Annual Report further states that the electricity department requires approximately R43 million per month to break even, considering bulk Eskom purchases, maintenance of ageing infrastructure, and staff costs.

However, the municipality is currently collecting an average of R23 million per month in electricity revenue.

This gap forms the basis of the reported R21–R23.5 million monthly loss.

Eskom Debt Pressure

The financial pressure is compounded by escalating Eskom debt. The report notes that while a payment plan was agreed with Eskom, the municipality is struggling to keep up with the agreed payments.

Interest charges on late payments have also contributed to financial strain, as reflected elsewhere in the Annual Report.

Smart Meter Programme Expected to Improve Collections

To address non-technical losses and revenue collection challenges, the municipality has begun implementing a smart meter programme.

According to the report, the smart meter installation is expected to assist the municipality in recovering approximately R22 million per month once fully implemented.

The project includes the deployment of smart meters over a three-year period, installation of a Meter Data Management System (MDMS), and infrastructure refurbishment to accommodate the new technology.

The initiative forms part of the municipality’s Financial Recovery Plan.

Infrastructure Challenges

The report also notes that the electricity network has not been adequately maintained due to resource constraints, with staff largely limited to fault repairs instead of preventative maintenance.

Ageing infrastructure, electricity theft, and illegal connections are identified as ongoing risks in the electricity function.

The figures form part of the municipality’s audited 2024/2025 Annual Report, tabled before Council under ITEM 1/2026.

Komani News has requested further comment from Enoch Mgijima Local Municipality regarding steps being taken to stabilise electricity revenue and improve collection rates. Updates will follow if a response is received.