Power utility Eskom has announced that it has begun a legal consultation process that could lead to electricity supply being interrupted
Image: File
Power utility Eskom has announced that it has begun a legal consultation process that could lead to electricity supply being interrupted to about 14 municipalities that have failed to pay their electricity bills.
Last year, IOL also reported that Eskom revealed that 87% of municipalities approved for the National Treasury’s municipal debt relief program are failing to meet the conditions required for debt write-offs, with only 10 out of 71 municipalities remaining compliant. Municipal debt to Eskom has now surpassed R110 billion.
The municipal debt relief program was introduced by the National Treasury in 2023 to help municipalities reduce the large debts they owe Eskom. It offers debt write-offs if municipalities pay their current bills consistently and meet certain conditions.
Eskom said it has exhausted all reasonable avenues through the Intergovernmental Relations Framework Act and is now issuing notices under the Promotion of Administrative Justice Act (PAJA), which gives affected municipalities an opportunity to make representations before any further action is taken.
"Around 14 municipalities have been selected because they have not settled their accounts for at least the last 18 months, have not met the conditions of the National Treasury municipal debt relief programme, or pose a significant financial risk to Eskom. Initiating the PAJA process ensures that Eskom complies with legal requirements while taking necessary steps to maintain the stability of the electricity supply system." Eskom said.
Eskom’s Group Executive for Distribution, Agnes Mlambo, said the power utility has to address rising arrears debt to protect the operational stability.
“We have to address rising arrear debt to protect the operational stability we have restored and the financial discipline we have rebuilt in the first three years of our turnaround to deliver on our developmental mandate. Through the turnaround, we are enabling business to protect and create jobs and supporting strategic industries to remain competitive, that in turn enable communities to thrive,” Mlambo said.
Eskom also called on all stakeholders to support efforts to resolve the matter and invites written representations or proposals that may assist in achieving a sustainable solution, and warned that if the municipalities fail to take corrective action, it may implement credit control measures permitted by law.
"Should the municipalities fail to take corrective action, Eskom will proceed with credit control measures, which may include interrupting electricity supply at predetermined times, as permitted by law. If defaults persist, Eskom will be compelled to limit supply to levels commensurate with payments received".
mthobisi.nozulela@iol.co.za
IOL Business