Eskom vows to go after municipalities that collectively owe R31bn

Power utility Eskom said on Wednesday it would enhance its efforts to collect money from municipalities, which collectively owe it more than R31bn.

Eskom made the announcement a day after it said the South Gauteng High Court affirmed its right to interrupt or terminate electricity supply to non-paying customers in a court ruling.

“This case was brought against Eskom by Pioneer Foods, in which it had sought to review and set aside Eskom’s 2018 decision to interrupt electricity supply to the Walter Sisulu Municipality due to its failure to pay for electricity supplied in terms of the municipality’s agreement with Eskom.

“The court ruled that Pioneer Foods had no standing in the electricity supply agreement between Eskom and the municipality, and dismissed the application with costs. Pioneer Foods is a customer of the municipality, and as such had no legal right (locus standi) to bring the case against Eskom to court,” said the utility.

The court dismissed the application with costs.

Eskom welcomed the judgment, which it said affirmed the validity and lawfulness of Eskom's right, power and entitlement to invoke section 21(5) of the Electricity Regulation Act of 2006. 

“The court has set the important legal principle that Eskom is only obliged to supply electricity to paying customers. The Electricity Regulation Act of 2006 entitles Eskom to interrupt electricity supply to a non-paying customer and in this matter Eskom had taken proper preliminary steps and due process which did not entitle the applicant to the interim interdict,” the power utility said in a statement.

The court said Eskom’s interruptions of supply to the defaulting municipality were important and necessary for Eskom’s survival, as the power utility could not be expected to continue supplying services to non-paying customers.

The court held that Pioneer Foods should have demonstrated that it first exhausted the internal remedies contemplated by the Electricity Regulation Act by approaching the National Energy Regulator (Nersa).

“The relationship between Eskom and the municipality is reciprocal in that Eskom supplies bulk electricity against payment. Having received the judgment, Eskom is now in a position to enhance its collection efforts from defaulting municipalities, who collectively owe Eskom in excess of R31bn in overdue debt,” added the utility.

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