10 October 2017

South Africa: Minister Des Van Rooyen On Ways to Improve the Running of Association of Municipal Electricity Utilities

press release

Minister urges everyone participating in the Association of Municipal Electricity Utilities to seek ways of improving the way business is running currently

Cooperative Governance and Traditional Affairs Minister, (CoGTA) Mr Des Van Rooyen said that solid and liquid waste can be beneficial to municipalities and their towns. The Minister was speaking at the Association of Municipal Electricity Utilities (AMEU) 66th Convention held in Nelson Mandela Bay Metro yesterday (09 October 2017).

The Minister told delegates about the importance of living in the future and not neglecting the possibility of relevance as a brand, as keeping up with trends in order to stay relevant is key.

"A large capital investment in power utilities by municipalities needs to be looked after through proper maintenance and care taken of these installations. Government acknowledges that municipalities are hampered by vacant positions for qualified technicians and engineers, hence the Capacity Development programme under MISA (Municipal Infrastructure Support Agent), which addresses this through training of artisans, technicians and engineers", said Minister.

Although much research has been undertaken in the provision of alternative energy sources, (i.e. solar PV panels etc.) leading to the development of reliable technology, the Minister cautioned delegates on the dynamics of power distribution in South Africa which is in a fast changing phase with major changes to the way distribution was done in the past. Minister emphasised that this will have to be implemented to keep up with the demand for technology driven systems and procedures.

A number of examples were cited by Minister, including retail industry, particularly the likes of Stuttaffords who became the casualty of a global shift to online retail and a domestic economic slump that had put brands beyond its customers' reach.

Minister also spoke of the impact that the rooftop installations (solar PV panels) will have in the near future when it comes to municipal revenue flow. He said that some form of regulation would have to be introduced to protect the national and municipal capital investments in power generation, transmission and distribution.

He also touched on the immense pressure that is on municipalities to develop a business model for generating, transmitting and distributing energy.

"We hope that working with institutions like the South African Local Government Association (Salga) would be beneficial as they would advise on how to move the process forward. Pricing models are already changing and ESKOM is focusing on rationalizing the tariff models currently in use", said Minister.

Minister noted that the AMEU is actively playing a collaborative role in the electricity utility world and it is with expectation that the AMEU conventions of the future will assist further in directing the way this industry will be changing.

In conclusion, Minister indicated that it would be important for municipalities to be proactive and adjust the pricing models for distribution of energy to their consumers within their licensed area.

Issued by: Department of Cooperative Governance

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