Eskom has launched a formal public consultation process that could lead to electricity supply interruptions in municipalities that have failed to pay their power bills for months.
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Power utility Eskom has launched a formal public consultation process that could lead to electricity supply interruptions in municipalities that have failed to pay their power bills for months.
The process is being conducted in terms of the Promotion of Administrative Justice Act (PAJA), which requires the utility to give affected parties an opportunity to make submissions before taking further action.
Eskom said the move comes after it exhausted attempts to resolve the issue through the Intergovernmental Relations Framework Act.
Around 14 municipalities have been identified for the process. According to Eskom, these municipalities have either failed to settle their electricity accounts for at least 18 months, have not complied with the conditions of the National Treasury municipal debt relief programme, or pose a significant financial risk to the power utility.
The consultation process allows municipalities and other stakeholders to make representations before Eskom decides on possible credit control measures.
“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,” said Agnes Mlambo, Eskom’s acting Group Executive for Distribution.
Eskom said it recognises that any disruption to electricity supply could affect communities, but warned that continuing to supply electricity without payment is not sustainable.
The utility noted that municipalities collect money from residents and businesses for electricity services. When those funds are not passed on to Eskom, it undermines the company’s finances and threatens reliable power supply.
If municipalities fail to regularise their accounts, Eskom said it may implement credit control measures. These could include interrupting electricity supply at predetermined times, as allowed by law. Should non-payment continue, the utility may further limit supply to levels that match the payments it receives.
Eskom said the municipalities involved collectively owe the company substantial arrears, making further delays in addressing the debt impossible.
Municipal electricity debt across the country has now exceeded R110 billion, despite efforts by the National Treasury to assist municipalities through a debt relief programme designed to ring-fence historic electricity debt and reduce interest so that municipalities can meet their current obligations.
Eskom also warned that rising municipal debt is affecting South Africa’s electricity reform plans, including efforts to allow new participants into the electricity market and the legal and operational unbundling of Eskom’s distribution business.
The power utility said it will consider all submissions received during the PAJA consultation process before announcing its next steps.