City Power says the Eskom debt matter is receiving attention from the City of Johannesburg’s (CoJ) executive mayor and the city manager, who are guiding the approach.

According to Roodepoort Record, this comes after Eskom threatened to cut off the CoJ over unpaid bills and money soon due, which has reached R6.8b.

Eskom outlines debt concerns

In a statement, Eskom said the CoJ and its entity, City Power (CP), currently owe a debt of R2.5b, excluding the current account, which is due on June 5 for a further R1.5b.

Eskom added that despite working with the CoJ over the past two years to support the metro in meeting its payment obligations, the entity has continued to fail its side of the process.

“As a result of CoJ and CP’s continued failure to honour its Electricity Supply Agreement with Eskom, including repeated defaults, Eskom was forced to issue a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points against the CoJ and CP.”

Eskom said it is unacceptable for residents and the whole of South Africa to carry the burden of the CoJ’s debt.

Revenue collection under scrutiny

In the statement, Eskom said CoJ and CP are collecting electricity revenue but failing to pay over Eskom’s share.

“While Eskom continues to focus on being cost-efficient, escalating municipal and metro arrear debt undermines these efforts. Eskom’s financial sustainability and ability to supply electricity at affordable prices are dependent 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,” the statement reads.

“Across the country, many municipalities and metros are working with Eskom to develop sustainable debt solutions, and Eskom is continuing to accelerate its support for this approach.”

Distribution agency agreements

Eskom announced on May 5 that nine municipalities have received council resolutions to sign distribution agency agreements (DAA) following consultation processes.

The DAA is a long-term, non-permanent contract between a municipality or metro and Eskom, where the utility takes over services like billing.

It also includes skills development and training, replacement or installation of smart meters, as well as revenue collection on behalf of the municipality.

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