Eskom and the country's municipalities lose more than 5% of their annual turnover to electricity theft, Energy Minister Dipuo Peters said on Wednesday.

Peters said in reply to a Parliamentary question that up to 50%, or 5 850 gigawatt-hours, of the electricity utility's losses in the 2008/9 financial year appeared to be the result of theft.

This resulted in a financial loss of up to R3,6-billion a year for the company, and the same figure for municipalities, she said.

"Assuming that most of the losses take place amongst residential customers who buy electricity at an average of 62c/kWh [kilowatt-hour], then the financial implications are from R2,5-billion to R3,6-billion per annum.

"It is estimated that the same amount of energy is lost by the municipalities."

But Peters pointed out that if the illegal connections causing the loss were legal, the consumers would have received a percentage of their power use as free basic electricity (FBE).

"Should each connection be using the average of 180kWh per month, it means the free basic electricity would have reduced the losses to around 72% of the above values and thus the loss would be reduced to R1,8-billion to R2,6-billion per year.

"With Eskom and municipalities combined, and taking into account the impact of FBE, the financial value amounts to R4,4-billion of lost revenue due to electricity theft."

She added: "This would be more than 5% of turnover, indicating the seriousness of the problem."

Eskom has blamed illegal connections for system overload and instability and conceded it contributed to higher electricity prices as the losses were built into tariff increase applications.