By Lerato Mpembe
The City of Johannesburg and its electricity provider, City Power, are facing potential power cuts after Eskom issued a formal notice of intention to interrupt electricity supply over an unpaid debt that has ballooned to nearly R5 billion. The staggering amount excludes an additional R1.4 billion due at the end of November, putting Johannesburg residents and businesses at risk of power disruptions if the city fails to settle its obligations.
Mounting Debt and Eskom’s Warning
Eskom has warned the City of Johannesburg (CoJ) that failure to settle the outstanding amount will lead to scheduled power cuts at specific times. Eskom spokesperson Daphne Mokwena expressed frustration with the municipality’s repeated failures to meet its payment obligations, pointing out that the utility has made considerable efforts to accommodate the city’s financial challenges.
“Despite all the avenues that Eskom explored and efforts to accommodate the CoJ, the matter has reached a point where Eskom can simply no longer afford to accommodate the CoJ without putting further financial strain on and harming its own business,” said Mokwena.
Johannesburg’s debt is part of a broader financial challenge facing Eskom, as municipal debt across the country continues to rise, now totalling approximately R90 billion. According to Mokwena, CoJ’s outstanding debt not only threatens Eskom’s financial stability but also hampers the utility’s capacity to provide a reliable power supply across South Africa.
The Dispute Over Billing and Set-Off Claims
The situation is further complicated by a dispute over alleged overbilling by Eskom. The City of Johannesburg has accused Eskom of inflating bills on certain supply points, a claim the city has yet to substantiate. In response, CoJ has reportedly applied set-off claims to reduce the total bill, deducting the disputed amounts from its monthly payments. However, Eskom maintains that these set-offs violate the electricity supply agreement and a prior understanding with City Power’s Chief Financial Officer Rendani Sadiki, and CoJ management.
Mokwena highlighted that during past discussions, City Power and Johannesburg city officials agreed to continue making payments while the overbilling claims were investigated. However, the city has since reneged on this commitment, causing the debt to escalate further.
Potential Implications of Power Interruptions
Eskom’s notice under the Promotion of Administrative Justice Act (PAJA) stipulates scheduled power cuts at specific times if the debt issue remains unresolved. It is unclear if these interruptions would affect the entire city or only specific areas within Johannesburg, adding to the uncertainty for residents and businesses alike. If implemented, these cuts would severely impact Johannesburg’s daily operations, including essential services, commerce, and industry.
The threat of power cuts has sparked concerns across the city, with business leaders and residents alike worried about the impact on economic activity and quality of life. Johannesburg is a key economic hub, and interruptions to the power supply could have far-reaching implications not only for the city but also for South Africa’s overall economy.
Eskom’s Call for Public Representations and Deadline
Eskom has given the City of Johannesburg until 8 November 2024 to submit its objections or propose solutions. The utility has also opened the matter for public participation, inviting interested and affected parties to submit written comments and objections by the deadline. This engagement is in line with Eskom’s PAJA obligations, which require transparency and stakeholder involvement in decisions that could impact the public.
The utility will review all submissions received and aims to make a final decision on 12 December 2024. This decision will determine whether Eskom will proceed with power interruptions or explore alternative solutions to address Johannesburg’s debt.
City of Johannesburg Hits Back at Eskom
In response to Eskom’s warning, the City of Johannesburg has contested the debt amount and asserted that Eskom’s billing practices may be inaccurate. The city argues that it has consistently raised concerns about overbilling, which it claims are inflating the outstanding amount unfairly. Johannesburg officials maintain that the set-off approach is a legitimate measure to protect the city’s financial interests until the billing dispute is resolved.
The CoJ’s response signals a lack of alignment between the city and Eskom on how to address the debt issue. Some city officials have suggested that Eskom’s approach to debt recovery is aggressive and potentially damaging to public interests, particularly when power interruptions could jeopardise essential services and disrupt the lives of millions.
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