Eskom could flip the switch on South Africa’s richest city

 ·5 May 2025

The City of Johannesburg faces new threats of legal action over its debt to Eskom, and parts of the city risk power cuts if the utility’s bills aren’t paid. 

This is the message from Chris Yelland, energy expert and director of EE Business Intelligence, who warned that the dispute between the City and the power utility has reignited. 

In November 2024, Eskom issued a notice of intention to interrupt power supply to Johannesburg, citing an outstanding debt of R4.9 billion in arrears, and an additional R1.4 billion in current charges. 

The City of Johannesburg and its electricity distributor, City Power, contested the charges, alleging overbilling of more than R3.4 billion. 

In response, Minister of Electricity and Energy, Kgosientsho Ramokgopa, intervened and appointed the South African National Energy Development Institute (SANEDI) to independently assess the disputed amounts. 

The report was initially expected by 25 November 2024; however, it was only submitted to the Minister approximately four months later.​

According to Yelland, while the report has yet to be made public, sources have said that it favours Eskom’s position. 

It shows that the arrear debt is more about the city’s dire financial state rather than an overbilling issue, as City Power argued. 

“City of Johannesburg has gone a full 360 degrees. We are back where we started,” an informed source told Yelland. 

“City Power and City of Johannesburg have not paid and will not pay. So, we are triggering the original action.”

Yelland noted that Eskom maintains that failure to pay its electricity bills hampers the utility’s ability to provide reliable power and exacerbates its own financial challenges.

Currently, municipal arrear debt to Eskom stands at more than R100 billion, with Johannesburg being a significant contributor. ​

At the end of last year, Eskom threatened power interruptions and targeted key areas, including the Johannesburg CBD, Midrand, and Cresta.

Yelland said this raises concerns for businesses and residents, as the unresolved dispute poses significant risks for Johannesburg, South Africa’s largest metropolitan municipality and economic hub. 

Eskom wants to take over municipalities

Eskom CEO Dan Marokane

Due to the rising municipal debt and noncompliance with the debt relief program, Eskom has asked the National Treasury to force municipalities in arrears to allow the utility to take over.

Eskom CEO Dan Marokane said the situation is dire, with municipal arrears rising by 33% from the previous year. 

He warned that if left unresolved, this could wipe out the benefits of the R254 billion government debt relief package aimed at stabilising Eskom.

To address the growing crisis, Eskom wants to implement distribution agency agreements allowing it to take over the management of electricity services in defaulting municipalities.

These agreements would let Eskom handle metering, billing, and revenue collection, while municipalities retain their own tariffs. 

Eskom would also be responsible for addressing electricity theft and ensuring a reliable supply. 

Funds allocated by the government for free basic electricity would be paid directly to Eskom, rather than to municipalities that often use them elsewhere.

According to Eskom’s head of distribution, Monde Bala, many municipalities cannot run their own electricity services alone, making Eskom’s intervention necessary. 

The Treasury’s municipal debt relief programme, launched in 2023, was meant to help by offering to write off municipal arrears over three years, provided strict conditions were met.

However, compliance has been poor. Of the 71 municipalities admitted to the programme, only 16 met the criteria by February 2025. 

Bala said some municipalities treated the programme like a payment holiday, while even major metros have started defaulting. 

Eskom plans to prioritise the top 14 defaulting municipalities, accounting for 58% of total arrears. 

Marokane stressed that without decisive action from the Treasury, talking alone would not solve the worsening crisis.

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