Eskom has served the City of Johannesburg (CoJ) and its power utility, City Power, with a notice of intention to interrupt power supply at certain pre-determined times of the day.
This in accordance with the Provision of Promotion of Administrative Justice Act (PAJA).
According to Eskom, the CoJ and City Power owe nearly R5 billion in unpaid bulk electricity supply, plus a further R1.4 billion, which Eskom said will become due and payable at the end of this month.
“Despite all the avenues that Eskom explored and efforts to accommodate the CoJ, the matter has reached a point where Eskom can simply no longer afford to accommodate the CoJ without putting further financial strain on and harming its own business.
“In terms of the Constitution and the Intergovernmental Relations Framework, the CoJ is supposed to cooperate and assist Eskom with fulfilling its mandate of ensuring that citizens have access to affordable electricity.
"The CoJ has breached these obligations by not paying Eskom for the bulk electricity it supplies, making it almost impossible for Eskom to fulfil its mandate,” the power utility said.
Eskom is expected to issue a public notice to those affected to submit comments on why the power utility “should or should not proceed to interrupt electricity supply to the points mentioned in the PAJA notice”.
“A final decision on whether Eskom will proceed with the interruption will be communicated after a review of the representations received through the PAJA process on 12 December 2024,” the power utility said.
Eskom explained that municipal debt – which currently stand at some R90 billion – forces it to “borrow additional money... to fund operational costs”.
“Operational costs should be funded by revenue generated from electricity sales and not by borrowings. Borrowing money to fund operational cash shortfalls caused by the failure of municipalities, such as the CoJ, to pay Eskom for bulk electricity increases the costs of providing electricity exponentially.
“Eskom’s financial sustainability and ability to supply electricity at affordable prices is contingent upon its ability to improve its balance sheet by increasing revenue and reducing expenses. Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs,” the power utility said.
Power struggle
Eskom has said the CoJ has “acknowledged its indebtedness to Eskom, but it refuses to pay the full amount of its monthly bill”.
“The CoJ alleged, without substantiating their claim, that Eskom is overbilling it on some of its supply points.
“It is for this reason that the CoJ is applying, set-off against the monthly bills raised by Eskom, which is contrary to the electricity supply agreement and the agreements reached with its Chief Financial Officer (CFO), Rendani Sadiki, and the Chief Executive Officer (CEO) of City Power, Tshifularo Mashava, and City of Johannesburg Management.
“In more than one meeting, it was agreed that the CoJ would continue to pay whilst the alleged overbilling is investigated. This undertaking has been reneged on,” Eskom said.
The CoJ and City Power hit back and said the city “strongly condemns this move as unjust, counterproductive, and potentially harmful to the residents and businesses of Johannesburg”.
“The CoJ has consistently demonstrated its commitment to meeting its financial obligations and has engaged with Eskom to address billing issues. However, Eskom has failed to provide clarity on disputed billing charges, forcing the city to seek legal recourse to protect the rights and interests of its citizens.
“Contrary to Eskom’s claims, there are ongoing disputes regarding overbilling of over R3.4 billion, with a pending appeal and monthly declarations since July 2024. The city has repeatedly raised concerns about this continued overbilling, which Eskom has failed to address, placing additional strain on the city’s resources,” a statement from the City read.
Furthermore, the CoJ called on the national electricity provider to engage in “genuine, good-faith negotiations to resolve these matters constructively”.
“Eskom’s approach of ‘pay now and resolve disputes later’ in its dealings with the City of Johannesburg can no longer go unchallenged. There is also an option of [Intergovernmental Relations] to resolve intergovernmental disputes, which Eskom keeps disregarding. The City, in consultation with its legal counsel, will explore all available legal avenues to prevent any disruptions to the electricity supply.
“We urge Eskom to reassess its stance and engage with the City in finding a mutually beneficial resolution. In the meantime, the City has formally requested that Eskom retract the Public Notice within five days.
“The people of Johannesburg deserve reliable and efficient services, and we will not let Eskom's actions compromise their well-being. We remain committed to serving the best interests of our citizens and will take all necessary steps to protect their rights,” the statement concluded. – SAnews.gov.za
