AMEU President Rob Ferrier says 2026 will test municipal power utilities on three fronts, namely new regulation, rooftop solar eating into revenue, and rising infrastructure crime.
Ferrier heads the Association of Municipal Electricity Utilities (AMEU), which represents municipal electricity distributors across Southern Africa. Speaking with ESI Africa on the association’s priorities for the year ahead, he lays out a sector under pressure from several directions at once.
Regulation reshapes the market
Electricity regulation sits at the top of Ferrier’s list. The Electricity Regulation Amendment Act (ERAA) is redrawing the structure of South Africa’s power market, and municipalities need to adapt without losing ground.
“We need to ensure that municipalities’ rights are protected during this time, as they move to a different model of providing electricity and ensuring revenue is maintained,” Ferrier says.
That shift matters because municipal utilities depend on electricity sales to fund other services. A weaker revenue base under the new model threatens more than the power account.
Rooftop solar squeezes revenue
Small-scale embedded generation (SSEG), mostly rooftop solar, is accelerating the problem.
The AMEU President explains that high electricity tariffs are the trigger. Consumers who can afford to install solar are doing so to escape rising costs, and taking their spending with them when they go.
“We are seeing more and more of our consumers moving to SSEGs on their rooftops, which is taking revenue away from the electricity utilities,” Ferrier says.
He wants municipalities to treat this as a design problem, not a lost cause. “Municipalities need to look at the best method of how we use these SSEGs. There are opportunities there to try to compensate for the revenue loss,” he says.
The AMEU and the South African Local Government Association (SALGA) have already published a joint resource pack to help municipalities fold embedded generation into their tariff models.
Theft and ageing assets bite
Vandalism and theft rank alongside regulation and solar among the sector’s biggest drains. Cable theft and equipment vandalism are stripping municipal networks bare, and Ferrier wants better protection for what remains.
“This is causing huge losses to municipalities. We need to look at how we modernise and update, and ensure security measures are taken to protect these essential assets,” he says.
He points to the Southern Africa Revenue Protection Association (SARPA) as a key partner in that fight. “We work with SARPA, as they are also important in this endeavour to ensure essential infrastructure is protected as much as we can,” Ferrier says.
Ageing infrastructure compounds the risk. Much of the network due for replacement predates today’s smart, remotely monitored equipment, and Ferrier lists it among the top concerns raised by the AMEU’s members, alongside theft and vandalism.
Treasury’s turnaround plan carries risk
National Treasury’s Metro Trading Services Reform, a R54 billion incentive programme launched in March 2026, aims to help.
The reform gives metros ring-fenced budgets and dedicated leadership for services including electricity, in exchange for stricter accountability, and metros must match it with a further R54 billion of their own investment to unlock the full R108 billion on the table.
Ferrier welcomes the funding but warns it will not fix anything on its own. “This will assist municipalities, but there are risks, as they need to ensure that this funding is used effectively to achieve the turnaround of the utility,” he says.
If the country’s metros make the model work, he believes it can cascade down to smaller municipalities as a proven approach to running the electricity service.
Illegal connections drain coffers
Illegal connections remain the single biggest driver of financial losses, Ferrier says, and the problem is not confined to major metros.
“The main issue behind higher losses is the high number of illegal connections. I believe this is not only within major municipalities; it’s also in smaller municipalities,” he says.
Solving it is central to keeping struggling utilities viable, he adds. Not every municipality is losing ground, though. Ferrier says some are managing losses well, and the AMEU is working to bring those lessons to others in the association.
Intelligent networks and smart metering will help too, giving municipalities the visibility to measure what enters and leaves their networks as wheeling and market participation expand under the new regulatory regime.
For utilities trying to defend a shrinking revenue base, knowing exactly where power and money are going is the best solution.
SALGA and Eskom ties deepen
The AMEU wants to expand its membership to spread these lessons more widely. Many smaller municipalities are financially stretched and struggle to take part in AMEU’s meetings, cutting them off from knowledge that could help them.
“I think the AMEU and SALGA need to see how we can attract smaller municipalities into the fold, as the lessons we learn through our association can go a long way to assist utilities in overcoming a lot of problems,” Ferrier says.
Eskom, itself an AMEU member, remains part of that conversation.
“The working relationship is quite good between the members of the AMEU, municipalities and Eskom. There are constant talks with Eskom on issues that affect municipalities, as well as what affects Eskom,” Ferrier says.
Convention to share solutions
Ferrier previews the AMEU’s 2026 convention, themed municipal power pioneering the future of South Africa’s electricity market under the ERAA, as a chance to take stock. New technical papers, product displays and direct access to peers await delegates.
“For a first-time attendee, I think there’s a lot of exciting things that they will be able to pick up and learn,” he says. “There’s a lot of good papers on lessons learned, on new technologies and methodologies. I think all attendees are going to find a lot of the papers exciting.”
The exhibition floor rounds out the picture. Ferrier expects affiliates to put on a strong show of new products and technologies, with exhibitors on hand to talk delegates through what is changing in the market. ESI
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