Eskom Issues Power Interruption Notice to City of Johannesburg Amidst R4.9 Billion Debt Dispute

South African power utility, Eskom, is taking stringent measures against the City of Johannesburg's power distributor, City Power, by serving a notice of its intention to interrupt electricity supply due to a massive outstanding debt of R4.9 billion, adding strain to Eskom's financial stability. Eskom's move highlights the ongoing conflict over billing problems that have escalated to a point where the national electricity supplier feels compelled to act to protect its own interests.

Eskom spokesperson Daphne Mokwena stated that the notice to the City of Johannesburg (CoJ) followed the rules outlined in the Provision of Promotion of Administrative Justice Act (PAJA). The unpaid debt not only includes the enormous sum of R4.9 billion but also accounts for an additional R1.4 billion, which is expected to become payable at the end of November 2024.

The financial imbroglio between the two entities continues despite ongoing legal engagements. In a recent development, City Power was accorded the opportunity to appeal a Johannesburg High Court verdict that had initially ruled in Eskom's favor regarding the outstanding bill for bulk electricity supply services for March.

The contention by the City of Johannesburg that it was entitled to set off payments against an amount it claims was overbilled by Eskom for electricity supplies has not been legally resolved yet. However, the city's argument has not been substantiated to Eskom's satisfaction, leading to the current standoff.

According to Eskom, there were agreements in place, confirmed through multiple meetings, that the City of Johannesburg would continue to honor its payment obligations while the purported overbilling was being investigated. Despite these assurances, which included commitments from CoJ's CFO Rendani Sadiki and City Power's CEO Tshifularo Mashava, the city has defaulted on this arrangement.

Eskom is now engaging broader stakeholder input through a public notice to be issued, wherein affected parties are invited to make written representations. The input from these submissions will guide Eskom's final decision on whether they will move ahead with the suggested power interruptions. The deadline for this consultative process is earmarked for 12 December 2024.

The broader implications of this power struggle jeopardize not only the fiscal health of Eskom, which is already under substantial financial pressure, but also the continuity of power supply to consumers in the Johannesburg region. With the threat of power disruptions looming, both entities are under pressure to reach a conclusive and sustainable resolution.