In an extraordinary scenario, a private sector distributor, Rural Maintenance, has been able to deliver electricity to four small rural towns in South Africa in “very good condition” through an unsolicited bid made to the Mafube Local Municipality in 2011. Under the agreement, Rural Maintenance has taken over the distribution of electricity and billing in the municipality while still allowing the municipality to set tariffs.
The infrastructure has not been privatised, and the network assets remain the property of the municipality, with the supply of electricity effectively outsourced. The contract runs for 25 years, and Rural Maintenance has invested R11 million per year for the past 11 years to upgrade the network, a total of R120 million, with tariff increases below those allowed by Nersa. Furthermore, its Eskom bill is up to date.
The number of full-time staff members has grown from 12 to 40 over the past 11 years, and bad debt write-offs stand at 0.5% of the total customer base of nearly 13,000 customers. The network is regularly audited by Nersa, and Rural Maintenance says its technical and non-technical losses are “around 6%”, which is remarkable compared to the average of substantially above 20% in comparable municipalities.
Rural Maintenance convinced Eskom to allow it to implement a different load shedding “methodology” in a three-month trial from 1 February by dividing Frankfort, one of the towns, into four main zones, with zones being switched off for one-and-a-half to two hours instead of the ‘standard’ two to two-and-half hours, reducing the impact on different consumer types with different needs.
Rural controls load shedding in Frankfort and ensures that the municipality’s water and sanitation pumps run 24 hours a day, reducing cable theft. Food producers are among the large power users in Frankfort who are catered for under the new methodology, which allows them to be off for nine hours and on for 15 hours during a stage 6 load shed period, critical for food production.
As the next step, they started using the 3,780 kW being generated by a solar plant that has been constructed outside the town by 19 community members and Rural Maintenance, with an additional 1 MWh Solar MD battery container in place to “reduce strain on Eskom during peak times”. Rural Maintenance is headquartered in Pretoria and was established in 1993, and has taken over operations and maintenance for three municipalities in Namibia since then.
In addition to the current modern management, Rural Maintenance is also planning to increase the battery and PV size to neutralize completely load shedding in Frankfort by the end of 2023, providing reliable and sustainable electricity to the community.
Due to the success of this model, there is increasing interest from fed-up residents and ratepayers in using this structure as a blueprint for other towns across South Africa.