Merafong’s energy poverty crisis deepens

In Merafong local municipality on Gauteng’s West Rand, households are connected to the national grid but cannot afford electricity, revealing how prepaid power, municipal debt and gaps in oversight are pushing residents into energy poverty.

Power lines run overhead, electricity meters are fixed to homes and official records list households as electrified. Yet inside many homes Oxpeckers recently observed, the lights were off. For a growing number of residents, the question is no longer whether electricity is available but whether it is affordable enough to use.

Across Carletonville and Khutsong, households described long periods without power after their free basic electricity allocations and prepaid electricity units ran out. Homes remain physically connected to the grid but electricity use becomes sporadic or disappears entirely – a phenomenon researchers describe as “self-disconnection”.

For some households, rising costs and prepaid metering systems have effectively turned municipal electricity into a backup source used only when money allows, rather than a reliable primary source of energy.

This energy crisis is unfolding in a municipality facing deep financial distress. According to Eskom, the Merafong local municipality owes R1.82 billion in electricity-related debt accumulated since 2015. 

Eskom said municipalities are responsible for billing and revenue collection within their licensed supply areas, including prepaid metering systems. When municipalities fail to pay Eskom for bulk electricity supply, the consequences extend beyond municipal finances.

Municipalities also play a critical role in shaping how and whether, households transition away from grid electricity, through decisions on tariffs, prepaid systems, indigent support and the approval or restriction of alternative energy options such as rooftop solar.

“Non-payment by municipalities places significant strain on the electricity value chain and ultimately affects Eskom’s ability to invest in infrastructure, maintain networks and ensure reliable supply,” Eskom said.

“Eskom acknowledges the concern of residents who meet their payment obligations but are affected by municipal non-payment. Municipalities remain responsible for billing and revenue collection from customers within their licensed areas, including prepaid environments.”

In response to Merafong’s mounting arrears, Eskom entered into a distribution agency agreement with the municipality. Under the arrangement, electricity billing and revenue collection are ring-fenced and administered through Eskom, with customers paying Eskom directly for electricity. 

The municipality retains its electricity distribution licence. Eskom said the agreement is intended to stabilise revenue flows and protect the electricity value chain. Billing and revenue collection “will be ring-fenced and administered through Eskom systems”.

The agreement, Eskom said, would not affect indigent households or the administration of free basic electricity (FBE), which provides qualifying low-income households registered on municipal indigent lists with 50 kilowatt hours of electricity per month at no cost.

In Merafong, as in many municipalities, prepaid electricity dominates household supply. Under prepaid metering systems, customers must pay upfront for electricity before they can use it.

For utilities and municipalities, prepaid meters reduce debt accumulation and improve revenue certainty. For households, they shift financial risk directly onto already constrained incomes.

The Organisation Undoing Tax Abuse (Outa), a non-profit civil rights organisation, said this shift lies at the heart of the affordability crisis. “Prepaid electricity shifts financial risk away from municipalities and utilities and places it directly onto households,” said an Outa spokesperson. 

“For low-income families, this often results in ‘self-disconnection’, not because electricity is unavailable but because it is unaffordable. When income runs out, electricity simply stops.”

“The problem is compounded when municipalities fall behind on payments to Eskom. “Outa has consistently observed that pressure is often shifted downstream to households, including higher tariffs, stricter enforcement, aggressive prepaid roll-outs and limited flexibility for consumers.”

Households that are paying for electricity are effectively subsidising municipal financial mismanagement, the spokesperson said. “Even compliant residents experience rising costs, reduced service quality and increased insecurity while the underlying governance failures remain unaddressed.”

Free Basic Electricty (FBE) is intended to protect indigent households by providing a minimum allocation of 50 kilowatt hours per month. In practice, its ability to prevent exclusion is limited.

Outa describes FBE as unevenly implemented and often insufficient, particularly in municipalities heavily reliant on prepaid revenue. “While the policy is well intentioned, the allocation is typically too small to meet basic household needs, especially when electricity prices continue to rise,” it said. 

“In prepaid-dependent municipalities, FBE can also be inconsistently credited, poorly communicated or lost entirely because of administrative failures. For many households, FBE does not prevent exclusion – it merely delays it.”

While municipalities and Eskom manage electricity supply on the ground, the prices households pay are shaped by tariff decisions approved by the National Energy Regulator of South Africa (Nersa).

Nersa spokesperson Charles Hlebela said the regulator performs a statutory approval and oversight role under the Electricity Regulation Act. “Municipalities are required to submit proposed tariff structures and increases to Nersa annually for review and approval prior to implementation. 

“In assessing these applications, the regulator evaluates whether proposed tariffs are cost-reflective, reasonable and aligned with approved regulatory frameworks and cost-of-supply principles, he said.

Nersa also considers the impact on low-income households through FBE, lifeline and subsidised tariffs, cross-subsidisation and public consultation. 

“The regulator’s role is to balance financial sustainability with consumer protection,” Hlebela said, noting it does not monitor household-level electricity use and that municipal debt is not a sole basis for tariff approval.

Tebogo Koboyankwe, a resident of Khutsong South, said unaffordable electricity tariffs and failing municipal systems have pushed many households into unsafe and informal coping mechanisms.

“The electricity issue here is mostly the high tariffs,” Koboyankwe said. “People simply cannot afford to pay anymore.”

Residents initially complied with prepaid systems when payments translated directly into usable power. That changed about a decade ago when the municipality began dividing prepaid purchases between electricity, water and other services.

“In the beginning, if you bought electricity, you got electricity. Then, out of the blue, the municipality decided to cut it. First it was 50–50, then 60–40, then 70–30, where 70% of your money goes to water and only 30% to electricity.”

This shift left households paying for services they could not track or afford, marking a turning point for many residents. “That’s when people said, ‘No way, we’re going to stop paying,’” Koboyankwe said. “That’s when the bypassing started.”

Electricity bypassing in the area is driven by survival, not criminal intent. “People are not bypassing because they want free electricity. They are bypassing because they are not working and the electricity is too expensive.”

Merafong is the site of an 800MW solar photovoltaic park, promoted as part of efforts to strengthen energy security and reduce reliance on Eskom. Currently in development, it is a public-private partnership with the Gauteng provincial government. 

However, Koboyankwe said local communities have not been informed about the development. “People here don’t know anything about it.” 

Outa warned that such large-scale renewable projects risk bypassing local households.

“Large-scale renewable energy projects should deliver clear benefits to the local community, not just power to the national grid,” the spokesperson said.

“Without measures to improve affordability and access, renewable projects risk repeating inequalities, where electricity is generated locally but remains unaffordable to nearby households.”

When electricity becomes unaffordable, households turn to dangerous alternatives. “We use a flaming stove and it’s very dangerous,” said Julia Kolodi, a Khutsong resident. 

“It smells and the smell stays in the house. I contracted tuberculosis because of the flaming stove. Gas is also expensive, yet we have electricity that we cannot use.”

Daphney Letswamotsi, also from Khutsong, told how rising electricity prices have pushed some residents to bypass their meters. “When you buy electricity for R20, they give you five units, which is nothing. That’s why people end up bypassing the meters.”

Dependent on a child support grant, Letswamotsi has few options. “I’m not coping,” she said. “I can’t even afford paraffin for the flaming stove.”

Oxpeckers sent questions to the municipality on 5 February. Despite follow-ups, including a final one on 18 February, no response had been received at the time of publication. 

Thabo Molelekwa is the assistant editor at  Oxpeckers Centre for Investigative Environmental Journalism

This investigation was supported by the  New Economy Hub and Ford Foundation