“We urge Eskom to reassess its stance and engage with the City in finding a mutually beneficial resolution. In the meantime, the City has formally requested that Eskom retract the public notice within five days,” it said.
According to Eskom the city and its power utility owe R4.9bn, excluding the current account of a further R1.4bn which will become due and payable at the end of November 2024.
The power utility said despite all avenues explored and efforts to accommodate the CoJ, the matter has reached a point where Eskom can no longer afford to accommodate the CoJ without putting further financial strain on and harming its own business.
“In terms of the Constitution and the intergovernmental relations framework, the CoJ is supposed to cooperate and assist Eskom with fulfilling its mandate of ensuring citizens have access to affordable electricity. The CoJ has breached these obligations by not paying Eskom for the bulk electricity it supplies, making it almost impossible for Eskom to fulfil its mandate,” Eskom said.
Eskom said when entities such as the CoJ fail to pay Eskom timeously or at all, it forces the power utility to borrow additional money at premiums to fund operational costs.
“Operational costs should be funded by revenue generated from electricity sales and not by borrowings. Borrowing money to fund operational cash shortfalls caused by the failure of municipalities such as the CoJ to pay Eskom for bulk electricity increases the costs of providing electricity exponentially,” Eskom said.
It said CoJ's failure to pay is contributing to growing municipal debt which, as of the end of September 2024, stands at R90bn.
It said its financial sustainability and ability to supply electricity at affordable prices is contingent upon its ability to improve its balance sheet by increasing revenue and reducing expenses.
“Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs,” said Eskom.
The CoJ said it has consistently demonstrated its commitment to meeting its financial obligations and has engaged with Eskom to address billing issues.
However, it said Eskom has failed to provide clarity on disputed billing charges, forcing the city to seek legal recourse to protect the rights and interests of its citizens.
The city said contrary to Eskom's claims, there are ongoing disputes regarding the overbilling of more than R3.4bn, with a pending appeal and monthly declarations since July 2024.
According to the city, concerns about continued overbilling were repeatedly raised, which Eskom has failed to address, placing additional strain on the city's resources.
The city said: “We are committed to ensuring uninterrupted access to electricity for the people of Johannesburg.”
TimesLIVE
Eskom threatens to flicker electricity to Joburg over failure to pay, City roars in protest
Power utility delivered notice of intent to interrupt power supply to City of Johannesburg and City Power at predetermined times of day
Image: REUTERS/Shafiek Tassiem
The City of Johannesburg (CoJ) and City Power say Eskom's intention to interrupt electricity supply to the city is unjust, counterproductive and potentially harmful to residents and businesses in Johannesburg.
On Thursday night Eskom shared publicly that it has delivered a notice of intent to interrupt power supply to Johannesburg at predetermined times of day in compliance with the Promotion of Administrative Justice Act (Paja).
The power utility said it would issue a public notice on November 8 2024 inviting all interested and affected parties to submit written representations, comments and/or submissions indicating why Eskom should or should not proceed to interrupt electricity supply to the points mentioned in the Paja notice.
It said a final decision on whether Eskom will proceed with interruption will be communicated after the representations received through the Paja process on December 12 2024 are reviewed.
In response Tebogo Moraka, the city's group financial officer, urged Eskom to retract its public notice and engage in "genuine, good-faith negotiations to resolve the matters constructively".
The city said Eskom's approach of “pay now and resolve disputes later” in its dealings with the CoJ can no longer go unchallenged.
“There is also an option of IGR [intergovernmental relations] to resolve intergovernmental disputes which Eskom keeps disregarding,” it said.
In consultation with its legal counsel, the city said it will explore all available legal avenues to prevent any disruptions to the electricity supply.
City Power may appeal judgment in payment dispute with Eskom
“We urge Eskom to reassess its stance and engage with the City in finding a mutually beneficial resolution. In the meantime, the City has formally requested that Eskom retract the public notice within five days,” it said.
According to Eskom the city and its power utility owe R4.9bn, excluding the current account of a further R1.4bn which will become due and payable at the end of November 2024.
The power utility said despite all avenues explored and efforts to accommodate the CoJ, the matter has reached a point where Eskom can no longer afford to accommodate the CoJ without putting further financial strain on and harming its own business.
“In terms of the Constitution and the intergovernmental relations framework, the CoJ is supposed to cooperate and assist Eskom with fulfilling its mandate of ensuring citizens have access to affordable electricity. The CoJ has breached these obligations by not paying Eskom for the bulk electricity it supplies, making it almost impossible for Eskom to fulfil its mandate,” Eskom said.
Eskom said when entities such as the CoJ fail to pay Eskom timeously or at all, it forces the power utility to borrow additional money at premiums to fund operational costs.
“Operational costs should be funded by revenue generated from electricity sales and not by borrowings. Borrowing money to fund operational cash shortfalls caused by the failure of municipalities such as the CoJ to pay Eskom for bulk electricity increases the costs of providing electricity exponentially,” Eskom said.
It said CoJ's failure to pay is contributing to growing municipal debt which, as of the end of September 2024, stands at R90bn.
It said its financial sustainability and ability to supply electricity at affordable prices is contingent upon its ability to improve its balance sheet by increasing revenue and reducing expenses.
“Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs,” said Eskom.
The CoJ said it has consistently demonstrated its commitment to meeting its financial obligations and has engaged with Eskom to address billing issues.
However, it said Eskom has failed to provide clarity on disputed billing charges, forcing the city to seek legal recourse to protect the rights and interests of its citizens.
The city said contrary to Eskom's claims, there are ongoing disputes regarding the overbilling of more than R3.4bn, with a pending appeal and monthly declarations since July 2024.
According to the city, concerns about continued overbilling were repeatedly raised, which Eskom has failed to address, placing additional strain on the city's resources.
The city said: “We are committed to ensuring uninterrupted access to electricity for the people of Johannesburg.”
TimesLIVE
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