Eskom threatens to cut power to 14 municipalities in South Africa
Eskom is in the process of issuing notices to municipalities across South Africa, where they must make representations before electricity supply is cut.
Eskom said that it had exhausted all reasonable avenues through the Intergovernmental Relations Framework Act.
The SOE is now issuing notices, providing affected parties with an opportunity to make representations before further action is considered, in accordance with the Promotion of Administrative Justice Act (PAJA).
Around 14 municipalities have been selected because they have either:
- Not settled their accounts for at least the last 18 months;
- Not met the conditions of the National Treasury municipal debt relief programme; or
- Pose a significant financial risk to Eskom.
Throughout the country, municipal debt has surpassed R110 billion despite the National Treasury’s intervention via a municipal debt relief programme.
The debt relief programme ring-fences historic electricity debt and suppresses related interest, creating space for municipalities to meet ongoing obligations.
However, Eskom said the persistent rise in arrears underscores the urgent need to proceed decisively with debt recovery.
Eskom said that starting the PAJA process ensures it can comply with legal requirements while taking the necessary steps to maintain the stability of the electricity supply system.
“We have to address rising arrear debt to protect the operational stability we have restored and the financial discipline we have rebuilt in the first three years of our turnaround to deliver on our developmental mandate,” said Agnes Mlambo, Group Executive of Distribution.
“Through the turnaround, we are enabling businesses to protect and create jobs and supporting strategic industries to remain competitive, which in turn enables communities to thrive.”
Eskom has encouraged all stakeholders to support efforts to resolve the matter and invites representations or proposals that may assist in achieving a sustainable solution.
Eskom said that it will determine the way forward once all representations submitted through the PAJA process have been fully considered.
The utility said it had no option but to initiate this process unless municipalities urgently regularise their accounts, as supplying electricity without payment is unsustainable.
“The municipalities collect revenue from customers for electricity services, and failure to remit these funds undermines Eskom’s financial viability, while impacting the delivery of electricity to the relevant communities.”
“Should the municipalities fail to take corrective action, Eskom will proceed with credit control measures, which may include interrupting electricity supply at predetermined times, as permitted by law.”
Should defaults persist, Eskom said that it will be compelled to limit supply to levels commensurate with payments received.
Eskom said that these municipalities owe Eskom substantial arrears, making it impossible for Eskom to delay further action.
“Initiating the PAJA process ensures that Eskom adheres to legislative requirements while taking necessary steps to protect the stability of the electricity supply system,” it said.
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