City Power's Eskom debt reaches "unprecedented levels"

Tuesday, May 7, 2024

Eskom says it will approach the courts in a bid to have City Power pay its R1 billion debt to the national power utility.

City Power is a company wholly owned by the City of Johannesburg which purchases, distributes and sells electricity within the city coupled with maintaining and installing electrical infrastructure.

The power utility said City Power’s debt stood at some R1.073 billion at the end of March this year.

“The escalating City Power debt…has left Eskom with no choice but to apply to the High Court in Johannesburg for a declaratory order to force City Power to pay what is due to Eskom. The case has been enrolled for hearing on 4 June 2024. The power utility started to default on its payments from October 2023 and no payment was received for the March 2024 invoice.

“The debt owed by City Power has reached unprecedented levels, exacerbating Eskom’s already strained financial situation. This dire situation not only undermines Eskom’s financial sustainability but also threatens its ability to maintain essential infrastructure, invest in new technologies and meet the growing energy demands of the province,” Eskom said.

According to the national power utility, City Power has “declared a dispute regarding potential overbilling on bulk purchase invoices dating back to 2021”.

“Eskom denies the claims made by City Power and will prove its position through the arbitration process.

“In terms of the electricity supply agreements sanctioned by the Electricity Regulation Act of 2006, if a municipality raises a dispute with Eskom, it must still pay. The dispute does not absolve it of its legal obligations to pay Eskom for the bulk electricity it has received.

“Eskom remains committed to fulfilling its mandate of providing reliable and sustainable electricity to assist in growing the economy of Gauteng, making the province an investment destination of choice,” Eskom said. –