PRETORIA, Gauteng — As political parties gear up for local government elections, the feasibility of a South Africa free electricity expansion has become a critical debate, especially with the staggering municipal debt to Eskom threatening grid sustainability. Energy expert Professor Vally Padayachee warns that while increasing power allocations for vulnerable households is a necessary step, the current financial trajectory of local governments makes fulfilling these pledges a monumental challenge without urgent structural reforms.
The African National Congress (ANC) has placed a revamped local government vision at the forefront of its campaign. Central to this platform is a commitment to provide enhanced free basic power to over 26 million social grant recipients. Alongside this, the party has set a target to slash municipal debt owed to Eskom and regional water boards by 30% by the year 2031, coupled with a pledge to secure cleaner audit outcomes for struggling councils.
Professor Vally Padayachee points out that the proposed hike in free basic electricity—from the current 50 kilowatt-hours (kWh) to a range of 200 to 300 kWh—is not just a political talking point, but a genuine necessity. In fact, he advocates for an even higher threshold of 400 kWh, noting that the existing 50 kWh limit was established in a completely different economic era and is now wholly inadequate given modern living costs and the soaring price of power.
However, the financial math presents a steep obstacle. The original 50 kWh framework was based on a mooted budget of 21 billion rand. According to the professor, the minister has indicated that this budget will not be expanded to accommodate the proposed 200 to 300 kWh increase. With the cost of electricity skyrocketing, funding this expansion without additional financial backing will be exceptionally difficult.
The broader economic case hinges on resolving deep-seated inefficiencies. A primary concern is the massive 111 billion rand that municipalities currently owe to Eskom. Furthermore, both the national utility and local councils are failing to collect billed revenues effectively. At the local level, reticulation services are plagued by physical leakages and administrative inefficiencies, which artificially inflate operational margins and drive up costs.
To reverse this trend, Professor Padayachee outlines a dual-pronged approach. First, municipalities must execute internal operational overhauls to eliminate waste and curb cost drivers. Second, national government intervention is already underway via a recently amended electricity pricing policy, currently open for public comment.
A standout feature of this new policy is the ring-fencing of technical and non-technical losses. Historically, the financial brunt of these losses was passed down to residential, commercial, and industrial consumers. Under the new framework, the National Energy Regulator of South Africa (Nersa) will enforce strict loss benchmarks. If Eskom or municipalities exceed these limits, they will be forced to absorb the financial penalty, shielding the end-user from bearing the cost of institutional inefficiency.
Achieving long-term stability requires a delicate balancing act. Professor Padayachee emphasizes that Nersa and the government must collaborate with local authorities to harmonize tariffs. This means simultaneously lowering affordability tariffs for struggling households while ensuring that Eskom and municipalities receive cost-reflective tariffs. Without this revenue sustainability, he warns, these essential institutions risk financial collapse.
With the election cycle in full swing, the professor advises citizens to scrutinize the veracity of campaign pledges. He notes that voters across the political spectrum share a unified demand: safe, reliable, and cost-effective electricity delivered immediately. He cautions that the luxury of a “100-day grace period” does not exist. Any party in power must deliver pragmatic, actionable solutions to the energy crisis without delay, solving the problem “yesterday, not the day before yesterday.”
