Eskom Issues Notice to Johannesburg Over R4.9 Billion Debt, Power Supply at Risk
In a serious escalation over unpaid bills, Eskom has issued a formal notice that could lead to scheduled power cuts for the City of Johannesburg. Eskom cites unpaid debt from City Power amounting to R4.9 billion, excluding an additional R1.4 billion due by the end of November 2024. The power utility claims that attempts to find alternative solutions have proven unsuccessful, leaving Eskom with no choice but to consider power cuts if the financial impasse continues.
Eskom Cites Legal and Financial Challenges in Sustaining Operations
Eskom’s latest announcement highlights a growing struggle to maintain financial sustainability due to overdue accounts from municipal customers. According to Eskom, the mounting municipal debt has now reached an overwhelming R90 billion as of September 2024. The utility emphasizes that it has reached a financial tipping point, where borrowing funds to cover operational costs is no longer viable.
In an official statement, Eskom argued that Johannesburg’s lack of payments forces them to borrow at high premiums, which raises the cost of delivering electricity. “Operational costs should be funded by revenue generated from electricity sales and not by borrowings,” Eskom stated. The utility also pointed out that Johannesburg’s failure to pay exacerbates the strain on Eskom’s balance sheet, adding, “Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs.”
Dispute Over Billing Practices Leads to Further Frustration
City Power has reportedly acknowledged its debt but claims that some charges from Eskom may be inaccurate, alleging overbilling at certain supply points. In response, the City has been applying a set-off against Eskom’s monthly bills, leading to a delay in full payments. Eskom has refuted these claims, emphasizing that any concerns over billing should be handled through continued payments as investigations proceed.
The electricity provider highlighted that agreements were made with City Power’s CFO, Rendani Sadiki, and CEO, Tshifularo Mashava, stipulating that payments would continue as the overbilling claims are investigated. According to Eskom, however, the City has reneged on this agreement.
Public Comment Period Announced Under the PAJA Act
In adherence to the Promotion of Administrative Justice Act (PAJA), Eskom has invited public submissions regarding the proposed power cuts. Interested parties have until December 12, 2024, to submit their input before a final decision on power interruptions is reached. Should Eskom proceed, Johannesburg could face scheduled power cuts to offset financial losses and encourage payment compliance.
Eskom has promised to update the public and the media with developments throughout this process, ensuring transparency and public engagement.
Impact of Potential Power Cuts in Johannesburg
If implemented, these power cuts could significantly affect businesses, households, and essential services across Johannesburg. With Eskom aiming to secure overdue funds through PAJA-approved measures, residents and stakeholders face the daunting prospect of intensified load-shedding and potential power outages as a consequence of the ongoing debt dispute.
Also read: 48-Hour Water Outage to Impact Over 10 Johannesburg Suburbs: Essential Maintenance Scheduled
