Eskom has warned it may interrupt electricity supply to parts of Johannesburg over the R5.2 billion debt dispute with the City of Johannesburg and City Power.
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The threat of electricity disruptions in Johannesburg has intensified after Eskom issued a formal notice warning that it may reduce, interrupt or terminate power supply to certain bulk supply points linked to the City of Johannesburg and City Power over unpaid debt exceeding R5.2 billion.
In a statement issued earlier this week, Eskom said the metro and its power utility currently owe the power utility more than R5.2 billion in arrears, excluding a further current account amount of R1.58 billion that is due on June 5.
According to Eskom, it has spent more than two years attempting to assist the City of Johannesburg and City Power in meeting their financial obligations, but repeated defaults and continued non-payment have now forced the utility to escalate the matter.
“Eskom has been working with the City of Johannesburg (CoJ) and City Power (CP) for over two years to support the metro in meeting its payment obligations,” the utility said.
“As a result of CoJ/CP’s continued failure to honour its Electricity Supply Agreement with Eskom, including repeated defaults, Eskom has been forced to issue a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points.”
The power utility stressed that residents should not be left carrying the consequences of what it described as a failure by the city to transfer electricity revenue collected from consumers to Eskom.
“It simply cannot be acceptable to the City’s residents and all South Africans that CoJ/CP is collecting electricity revenue but failing to pay over Eskom’s share,” the utility said.
In response to the statement, Joburg mayor Dada Morero, in a media briefing on Wednesday, said this challenge is not only affecting the City of Johannesburg but several municipalities across the country.
“We will not fight Eskom. We will work with the Minister of Electricity and Energy and the South African Local Government Association to resolve this challenge. We are on track to ensure that we resolve this dispute with Eskom.
He added that City Power had a turnaround plan which included reform of trading services.
Meanwhile Eskom said progress was being made elsewhere in the country, saying several municipalities were already working with Eskom on long-term debt resolution strategies.
The power utility revealed that nine municipalities have already secured council resolutions to sign Distribution Agency Agreements (DAAs), which form part of the utility’s Active Partnering initiative announced earlier this month.
The DAA model is designed as a long-term but non-permanent agreement between Eskom and municipalities or metros aimed at restoring financial and technical sustainability in electricity distribution.
Under the arrangement, Eskom may assist municipalities with revenue collection, smart meter installations, skills development and operational support.
The utility said the initiative is intended to help struggling municipalities stabilise electricity delivery and improve financial management.
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