Eskom has applied to the Gauteng High Court in Johannesburg for a declaratory order to force City Power to pay its R1 billion debt.
City Power, which supplies residents under the City of Johannesburg Metropolitan Municipality, is defaulting on its payments.
CITY POWER OWES ESKOM R1 BILLION
On Monday, 6 May, Eskom said the matter is enrolled and will be heard at the Gauteng High Court in Johannesburg on 4 June.
Eskom said City Power owes R1 073 billion and started to default on its payments in October 2023. Furthermore, the national power supplier did not receive payment for March 2024.
“The debt owed by City Power has reached unprecedented levels, exacerbating Eskom’s already strained financial situation. The dire situation undermines Eskom’s financial stability and threatens its ability to maintain essential infrastructure, invest in new technologies, and meet the growing energy demands of the province,” Eskom Gauteng spokesperson Amanda Qithi said.
POWER UTILITY LODGES A DISPUTE
In addition, Eskom said City Power declared a dispute regarding potential overbilling on bulk purchase invoices dating to 2021.
Qithi said in terms of the Electricity Regulation Act of 2006, if a municipality raises a dispute with Eskom, it must still pay. So, City Power is still liable for settling its debt as it had already received bulk electricity from Eskom.
MUNICIPALITIES WANT THEIR DEBT TO BE CLEARED
During the Medium Term Budget Policy Statement, Finance Minister Enoch Godongwana revealed that over 60 municipalities that owe Eskom for unpaid bulk electricity services applied for government’s debt relief arrangement.
During his speech, Godongwana said by October 2023, 67 applications had been submitted, totalling R56.8 billion or 97% of the total municipal debt owed to Eskom in end-March 2023.
“Twenty-eight applications have been approved; the remainder are being assessed and verified with provincial treasuries,” Godongwana said.
The programme was announced during the Budget Speech in February 2023 to assist ailing municipalities who are struggling to pay their electricity bills.
