A showdown is looming between Eskom and the City of Joburg and its power utility City Power about Eskom’s plans to interrupt power supply to the city due to its outstanding bulk electricity bill.
Civil rights group AfriForum, an experienced litigant in the electricity space, has indicated that it is ready to join the fight and electricity and energy minister Kgosientsho Ramokgopa will on Monday formally meet Joburg mayor Dada Morero to try to find solutions to the dispute.
Unless resolved, residents may be the ones at the receiving end when their lights go out again.
According to Eskom, the City of Joburg owes it R6.3bn, of which R4.9bn is arrears debt, and it has started the process to begin scheduled interruptions of power supply.
“It will be like bringing load-shedding back,” Econometrix chief economist Azar Jammine said.
Eskom served a notice on the two entities on Thursday of its intention to interrupt their power supply and announced it would publish a public notice on Friday to invite submissions from stakeholders for or against such interruptions.
Taking the submissions into account, it will decide by December 12 how to proceed. The City of Joburg has formally requested Eskom to withdraw the public notice.
“The city strongly condemns this move as unjust, counterproductive, and potentially harmful to the residents and businesses of Johannesburg,” it said in a statement issued just before midnight on Thursday, about four hours after Eskom announced its plans.
“Contrary to Eskom’s claims, there are ongoing disputes regarding overbilling of over R3.4bn with a pending appeal and monthly declarations since July 2024. The city has repeatedly raised concerns about this continued overbilling, which Eskom has failed to address, placing additional strain on the city’s resources,” the city stated.
It vowed to fight Eskom in court if necessary to keep the lights on. Eskom said it “can simply no longer afford to accommodate the City of Joburg without putting further financial strain on and harming its own business.”
Eskom CFO Calib Cassim confirmed on Friday morning that total municipal debt to the utility is growing by between R1bn and R1.5bn per month. At the end of September, it stood at R90bn.
Business Unity SA (Busa) director for the environment and energy Happy Khambule said Joburg residents may have to start bypassing City Power and paying Eskom directly. An agreement to that effect for large power users was earlier made an order of court in the Maluti-a-Phofung municipality based in Harrismith.
Khambule said City Power’s billing system is broken. The situation is bad for business, and he warned that it may lead to a further capital flight out of Johannesburg.
“Residents lose trust in the municipal governance system, because they pay the municipality, but the municipality does not pay Eskom.”
Residents lose trust in the municipal governance system, because they pay the municipality, but the municipality does not pay Eskom.
— Business Unity SA director for the environment and energy Happy Khambule
He said that undermines trust in the local economy. “The last thing we need is more businesses leaving Joburg.”
Jammine said Eskom’s threat may be productive by bringing the issue of nonpayment to the fore. “We need to deal with municipalities’ non-performance, he said.
He added if Eskom implements its plans, it will damage the business hub of SA with a wider effect than only the city. Predictability about the scheduling of interruptions will be key to limit the damage, he said.
Smaller businesses will suffer more, because most bigger businesses have made provision for load-shedding already, which will stand them in good stead should Eskom proceed.
City Power argued that Eskom’s approach is one of “pay now and resolve disputes later,” and pointed out that the utility is disregarding the obligation to first try to settle intergovernmental disputes according to the provisions of the Intergovernmental Relations Framework Act.
Morne Mostert, head of municipal affairs at AfriForum, who has litigated on behalf of residents of several municipalities in similar situations, agrees with this position. He said the courts made this clear in the Resilient case a few years ago.
When Eskom is seeking such an extreme remedy like interrupting power supply, it must act procedurally fairly not only regarding the municipality, but also towards the communities that will be affected.
— Morne Mostert, head of municipal affairs at AfriForum
“When Eskom is seeking such an extreme remedy like interrupting power supply, it must act procedurally fairly not only regarding the municipality, but also towards the communities that will be affected.”
AfriForum on Friday instructed its lawyers to join the dispute, to ensure the rights of residents are protected, he said. Mostert added the kind of threat made by Eskom is often with an eye on government’s distribution of the equitable share to municipalities.
He also asked why the provincial government through the MEC for local government and the minister of co-operative governance and traditional affairs doesn’t intervene.
Mostert said energy regulator, the National Energy Regulator of South Africa (Nersa), must also act against municipalities that fail to adhere to the conditions of their distribution licenses, including failure to pay for their bulk purchases from Eskom.
Ramogkopa on Friday attended Joburg mayor Morero’s mayoral imbizo where they discussed the city’s dispute with Eskom.
City of Johannesburg said in a statement on Friday afternoon that Morero and Ramokgopa “underscored the need to streamline the public narrative regarding the Eskom/City Power issue. They recognised that multiple interpretations of the situation can lead to misinterpretations and anxiety within the community.”
They agreed to a formal meeting on Monday to seek solutions.
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