In what has been described as a landmark judgement, the Gauteng High Court has ruled that Eskom may not unilaterally disconnect defaulting municipalities from power.
The power utility has previously threatened to turn off areas that have fallen behind their payment in an effort to get these municipalities to pay up – often prejudicing residents in these areas who have paid their bills.
However, in its judgement on Friday (8 March), the High Court ruled that Eskom (as an organ of state) is not allowed to interrupt electricity supply to a delinquent municipality (also an organ of state) until it has exhausted all remedies contained in sections 41 and 42 of the Intergovernmental Relations Framework Act.
This effectively means that Eskom may not threaten to cut power to these defaulting municipalities before first following all due processes in trying to collect the outstanding amount.
Civil society group Sakeliga, which acted as an amicus curiae (friend of the court) in the matter, said that the judgment has far-reaching implications for local business communities and the public across the country.
“Eskom’s unilateral interruption of power supply because of disputes with municipal authorities were destroying local economies all over the country,” said Piet le Roux, Sakeliga’s chief executive.
“Paying business people and other users were being held hostage, as it were, in a dispute between two dysfunctional branches of the same state: on the one hand Eskom and on the other hand municipalities.
“This has cost local business communities millions of rands in obtaining court orders to prevent Eskom from interrupting their power supply after they had already paid for the electricity but the local municipality had failed to pay the money over to Eskom.
“This judgment means that the threshold at which Eskom is allowed to cut power to local communities is now much higher than before. We believe this could save business communities all over the country millions in legal costs,” he said.