CoJ faces potential power cuts over unpaid Eskom debt

City owes the utility R4.9bn, with further payments due at the end of the month.

Eskom has issued a notice of intention to cut power at certain pre-determined times of day to the City of Johannesburg (CoJ) and City Power due to an unpaid debt of R4.9 billion, with an additional R1.4 billion expected to be due by the end of November.

The notice, issued in accordance with the Promotion of Administrative Justice Act (PAJA), follows the utility making numerous efforts to reach a resolution regarding the debt with the city.

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Read: Eskom heads to court to get City Power to pay up [May 2024]

Eskom said it could no longer absorb the costs of Johannesburg’s unpaid electricity bills without risking further financial strain on its operations.

It said when municipalities like the CoJ do not pay it on time, it is forced to secure costly loans to fund essential operations, leading to an exponential rise in electricity costs.

“The failure to pay by the CoJ is contributing to the growing municipal debt which, as at the end of September 2024, stands at R90 billion,” Eskom said.

Read:
Delinquent municipalities owe Eskom R82.3bn
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“Eskom’s financial sustainability and ability to supply electricity at affordable prices is contingent upon its ability to improve its balance sheet by increasing revenue and reducing expenses.

“Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs,” it said.

Eskom said the CoJ has acknowledged its debt, but refuses to pay the full amount of its monthly bill.

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“The CoJ alleged, without substantiating their claim, that Eskom is overbilling it on some of its supply points. It is for this reason that the CoJ is applying set-off against the monthly bills raised by Eskom, which is contrary to the electricity supply agreement and the agreements reached with its Chief Financial Officer (CFO), Rendani Sadiki, and the Chief Executive Officer (CEO) of City Power, Tshifularo Mashava, and City of Johannesburg Management.

“In more than one meeting, it was agreed that the CoJ would continue to pay whilst the alleged overbilling is investigated; this undertaking has been reneged on,” Eskom said.

The utility said the Constitution and the Intergovernmental Relations Framework mandate the CoJ to assist Eskom in delivering affordable electricity, a responsibility it claims the city has failed to meet by neglecting payments for its bulk electricity supply.

Eskom said it will issue a public notice on Friday (8 November) inviting submissions from all interested and affected parties on why it should or should not proceed to interrupt electricity supply.

It said a final decision on whether it will proceed with the interruption will be communicated after a review of the representations received through the PAJA process on 12 December 2024.

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