Eskom taking Joburg to court over R1 billion debt

 ·6 May 2024

Eskom is taking Johannesburg’s City Power to the High Court due to debts of over R1 billion.

The national utility said that City Power’s debt of R1.073 billion as of 31 March 2023 has left it with no choice but to approach the Johannesburg High Court for a declaratory order to force City Power to pay what is due.

The Johannesburg power utility started to default on payment in October 2023, and no payments were received from March 2024 onwards, it said.

The case has been enrolled for hearing on 4 June 2024.

“The debt owed by City Power has reached unprecedented levels, exacerbating Eskom’s already strained financial situation.”

“This dire situation not only undermines Eskom’s financial sustainability but also threatens its ability to maintain essential infrastructure, invest in new technologies and meet the growing energy demands of the province.”

On the other hand, City Power declared a dispute regarding potential overbilling on bulk purchase invoices dating back to 2021, which Eskom denies and claims it will provide through the arbitration process.

Eskom said that the Electricity Regulation Act of 2006 states that if a municipality raises a dispute with Eskom, it must still pay.

“The dispute does not absolve it (City Power) of its legal obligations to pay Eskom for the bulk electricity it has received.”

Not the first

Eskom’s financial situation has been heavily affected by the non-payment of municipalities in South Africa, with municipal debt standing at R70 billion nationwide in December 2023.

A well-known municipality that is often in debt is Tshwane, which owed Eskom close to R4 billion by the end of January 2024

That said, at least 70 municipalities have applied for and been approved for the Eskom debt relief programme introduced by the National Treasury last year, which aims at assisting municipalities to pay off their bulk electricity supply debt to Eskom.

“By December 2023, 72 applications had been submitted, totalling R56.7 billion or 96.9 % of total municipal debt owed to Eskom at end‐March 2023. [Some] 70 applications totalling R55.2 billion had been approved as of January 2024, said Treasury during the 2024 Budget.

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