A national project to take electricity to indigent people and to remote parts of the country means that the eThekwini Municipality will soon no longer be responsible for electricity distribution.
The initiative to restructure the supply of power in South Africa is known as the Regional Electricity Distributors (Red).
It aims to help the country's smaller and struggling municipalities.
President Thabo Mbeki announced the restructuring
during his state-of-the-nation speech in 2004.
However, fears have already been expressed that the move will damage Durban's credit control policy and its hard-earned high credit rating.
The credit rating is an important indicator of the city's financial health.
Members of the city's executive committee raised these concerns this week when officials from Electricity Distribution Industry, a company facilitating the formation of the Red, briefed councillors on how the restructuring would change the work of municipalities.
But there was agreement from city officials that the restructuring would eliminate unequal treatment of consumers across the country, improve reliability of electricity supply and address disparities in tariffs.
The move will give rise to six regional centres across the country and the first phase is expected to start in the Eastern Cape in June. The second phase will be carried out between June 2005 and January 2007.
City Manager Mike Sutcliffe welcomed the restructuring but said there were challenges that should be outlined before the implementation of the project was finalised.
He said issues concerning electricity revenue, the city's credit rating, electricity infrastructure and staffing should be clarified.
"The benefit for the country as a whole is that the Red will contribute to the production of electricity to the poor, and as Durban we want to be part of that process," said Sutcliffe
He said the city was hoping that the restructuring would not cause serious problems for consumers or municipal staff.
"We don't want the restructuring to lead to the retrenchment of some of our staff."
Sutcliffe said although the city's electricity supply was running efficiently, Durban could not be expected to be an island of prosperity.
The head of the city's electricity department, Howard Whitehead, said the primary objective of the Red was to create fairness and address inequality in electricity supply.
He said the impact of the change on the city's credit rating had not been assessed. This should be addressed as a matter of urgency.
He said Durban was going to be compensated for losing its valuable electricity distribution assets that would be taken over by the Red.
Lyn Ploos van Amstel, the Democratic Alliance caucus leader and a member of the city's executive committee, said the electricity restructuring process was a major undertaking that had pros and cons.
"At this stage, however, it is extremely difficult to establish what the benefits of the restructuring are for eThekwini," said Van Amstel.
eThekwini was fortunate that it enjoyed a well-run and stable electricity distribution network, she said.
"While it is possible to see the benefits of such a programme from a national perspective, because the restructuring will bring order and regulation," Van Amstel said, "there are major implications for eThekwini in that the restructuring has the potential to impact severely on the city's credit control policy and even the high credit rating the municipality enjoys."