South Africa’s uMngeni Municipality has installed 1,885 smart meters to curb electricity losses, recover revenue and reduce illegal connections.
The uMngeni Local Municipality in South Africa’s KwaZulu-Natal province is expanding smart metering to reduce electricity losses and recover revenue.
The municipality has spent R5.7 million installing 1,885 smart meters in homes without meters or requiring replacements. However, completing the programme will require another R36 million, according to Mayor Christopher Pappas. The figures and details were reported by GroundUp.
The rollout follows years of significant electricity losses. At their peak, losses reached more than 60% of electricity purchased from Eskom, costing the municipality up to R83 million annually.
The new meters have already increased revenue. Pappas told GroundUp that the municipality generated an additional R1 million in July and expects monthly revenue gains of approximately R900,000.
Smart Metering Targets Persistent Electricity Losses
The municipality’s audited financial statements show that electricity losses reached nearly R75 million in 2018/19 and exceeded R83 million in 2019/20.
Although reported losses fell sharply in 2020/21 and 2021/22, municipal officials attributed the decline to a temporary change in reporting methods.
Losses subsequently increased, reaching 34% of electricity purchased in 2024/25. The municipality expects them to fall to approximately 27% in 2025/26.
Meanwhile, officials are targeting illegal connections that contribute to losses and damage electricity infrastructure.
In Mpophomeni, an electricity audit reportedly found that more than 90% of households in the audited area had illegal connections. The municipality has also linked transformer replacement to its ability to audit affected areas.
Funding Gaps Could Slow the Rollout
Completing the smart metering programme will require an additional R36 million. The municipality plans to use reallocated budgets and funds recovered from uMngeni-uThukela Water.
The municipality recently discovered that it had underbilled the water utility for electricity used at its Mpophomeni treatment plant for almost 20 years. The error cost the municipality R25 million, Pappas said.
The water utility has agreed to repay the money, which the municipality intends to ring-fence for smart metering.
The municipality also sought support from a National Treasury programme designed to help municipalities address electricity losses. However, Treasury reportedly rejected its application because the programme assists municipalities that default on Eskom payments.
Despite the funding setback, the municipality continued paying Eskom rather than deliberately defaulting to qualify for assistance.
Residents Raise Concerns About Affordability
While smart meters could improve revenue collection and reduce pressure on electricity infrastructure, some residents say the system makes electricity harder to afford.
Residents in Mpophomeni have reported struggling to purchase enough electricity units for basic household needs. Community representatives have also highlighted households that earn too much to qualify for indigent assistance but cannot comfortably afford electricity.
One community representative proposed a flat-rate tariff offering a set quantity of electricity based on household income.
However, Pappas supports a user-pays system combined with assistance for qualifying low-income households. He argues that the approach offers a fairer and more sustainable way to manage electricity costs.
Revenue Recovery Extends Beyond Metering
The municipality is also pursuing other measures to address infrastructure and governance challenges.
It plans legal action against the uMgungundlovu District Municipality over sewage leaks and wastewater infrastructure concerns. Raw sewage has reportedly entered local rivers and streams, including waterways flowing towards Albert Falls Dam.
The municipality is also considering legal action against Transnet over neglected properties linked to illegal dumping and informal settlements. Separately, it is pursuing a case against Msunduzi Municipality over electricity supply in Hilton, where it alleges the neighbouring municipality operates without the required licence.
These disputes form part of broader efforts to address municipal service delivery and accountability.
The smart metering programme remains a central part of uMngeni’s electricity strategy. Its longer-term impact will depend on completing installations, reducing illegal connections and ensuring residents can afford reliable electricity.