Eskom on City Power
Eskom has announced its decision to seek legal intervention against City Power over an outstanding bill of over R1 billion. City Power, a key entity under the City of Johannesburg, is facing scrutiny for failing to clear its debts for the electricity it purchases and distributes across Johannesburg. This move by Eskom highlights the growing concerns over the financial health of the nation’s critical infrastructure sectors.
As of the end of March this year, City Power’s debt to Eskom has reportedly ballooned to an alarming figure of R1.073 billion. In light of these developments, Eskom has found itself compelled to approach the Johannesburg High Court, seeking a declaratory order that would mandate City Power to settle its arrears. This legal battle is set to unfold on 4 June 2024, marking a significant standoff between the two powerhouses.
The financial strain has been mounting since October 2023 when City Power purportedly began defaulting on its payments, with no recorded payments for March 2024 either. This escalating debt crisis has placed Eskom in a precarious position, threatening the utility’s ability to sustain its operations, maintain infrastructure, and pursue future technological advancements.
Adding to the complexity is City Power’s contention on the matter, with claims of potential overbilling on bulk purchase invoices dating back to 2021. However, Eskom remains steadfast in its stance, ready to contest City Power’s allegations through arbitration. Under the electricity supply agreements outlined by the Electricity Regulation Act of 2006, Eskom argues that a dispute does not alleviate City Power’s obligation to pay for the consumed electricity.
This dispute comes at a critical time when Eskom’s financial stability is more crucial than ever for the energy future of Gauteng and, by extension, South Africa. The national power utility continues to emphasize its dedication to providing reliable and sustainable energy solutions geared towards bolstering the economy of Gauteng and enhancing its attractiveness to investors.
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