Nine municipalities are set to enter agreements that would give Eskom a role in managing parts of their electricity distribution systems after a legal consultation process launched in March.
Municipalities owe the power utility R111.6bn and the debt keeps escalating.
The developments follow Eskom’s initiation of a process under the Promotion of Administrative Justice Act against 14 municipalities that had failed to settle their bulk electricity accounts, in some cases for at least 18 months.
They had also not complied with the conditions of the municipal debt relief programme administered by the National Treasury or were considered a significant financial risk to the utility.
The Promotion of Administrative Justice Act process required municipalities and stakeholders to make representations before Eskom could proceed with further steps, including possible electricity supply interruptions.
Nine municipalities — Nketoana, Mpofana, Masilonyana, Nala, Ngwathe, Renosternberg, Thembelihle, Govan Mbeki and Kgetlengrivier — have since adopted council resolutions to sign distribution agency agreements with Eskom, the utility said.
A council resolution refers to a formal decision taken and approved by a municipal council through an official vote, authorising a specific action on behalf of the municipality.
Under these agreements, Eskom partners with municipalities for a defined period and provides support in areas including billing, maintenance of electricity infrastructure and debt collection. Eskom said engagements are ongoing on the implementation of the agreements.
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In a separate development, the City of Ekurhuleni reached a payment arrangement with Eskom, which resulted in the withdrawal of the utility’s earlier intention to interrupt electricity supply.
The utility has also entered into a prepayment arrangement with Inxuba Yethemba Local Municipality in the Eastern Cape, under which electricity is supplied based on amounts paid in advance.
However, three municipalities — Dr Beyers Naude in Eastern Cape, Kai Garib in Northern Cape and Mamusa in North West — did not provide representations that offered a viable solution after the Promotion of Administrative Justice Act notices. Eskom has issued final notices indicating that electricity supply interruptions are scheduled to begin on May 8, “though engagements remain ongoing”.
Eskom said the Promotion of Administrative Justice Act process ensures compliance with legal requirements while enabling the utility to take steps to maintain the stability of the electricity supply system.
“Recovering municipal debt enables Eskom to deliver a consistent electricity supply and invest in our infrastructure, enable businesses to protect and create jobs, and reduce dependence on the fiscus,” said acting group executive for distribution Agnes Mlambo.
While some municipalities have made commitments through agreements and payment arrangements, rising municipal debt remains one of Eskom’s main challenges, Mlambo said.
Eskom said it would continue engaging with municipalities and stakeholders as part of the process.
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