Eskom dealt blow after ConCourt rules against reducing electricity

Ailing parastatal Eskom has been dealt a blow after the Constitutional Court (ConCourt) dismissed an appeal by the power utility against an interdict barring it from reducing electricity supplies to two municipalities in the Free State and Mpumalanga.

Justice Mbuyiseli Madlanga handed down the judgement on Friday.

Municipalities take Eskom to court

The Vaal River Development Association and the Lekwa Ratepayers Association, based in Mpumalanga and Free State, took Eskom to court in 2020 after it capped the electricity it provided.

Eskom reduced its bulk electricity supply to the two municipalities to the maximum level contained in supply contracts, known as Notified Maximum Demand (NMD) agreements.

However, according to Eskom, the two municipalities owed the utility a total of R2.8-billion which resulted in extended power cuts and untreated sewage leaking into the Vaal River system.

Eskom fights back

While the state-owned entity challenged a high court ruling to increase the amount of electricity it supplied the two municipalities, the Supreme Court of Appeal dismissed Eskom’s application.

Eskom then approached the highest court in the land arguing that it should not be compelled to provide the indebted municipalities with more electricity than provided for in the NMD agreements.

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ConCourt ruling

On handing down the judgement, Justice Madlanga said the majority found the High Court and Supreme Court of Appeal correctly granted interim interdicts against the parastatal prohibiting it from reducing the bulk electricity supply it previously supplied to municipalities.

“This is so because Eskom’s decision infringed the rights of the residents of the municipalities, as set out in the Bill of Rights. The deplorable nature of the violations amply demonstrates that the harm suffered by the residents would be irreparable.”

Residents favoured

Justice Madlanga said he had no doubt the balance of convenience favoured the residents.

“Ergo, the majority judgment determined that the balance of convenience unquestionably favours the residents; and, accordingly, would have the residents – purely on an interim basis – living lives that are as near as possible to wholesome, then subject them to the current ‘human catastrophe’, the court ruled.”

He said the majority pointed out that Eskom promised one of the municipalities that it would not affect the reduction if that municipality paid the arrears owed to Eskom, rendering the reduction decision a thinly-veiled debt collection mechanism.

“Thus, the cry about the risk of collapse of the national grid rings hollow in the face of Eskom’s attempt to extract payment on pain of effecting a reduction in the electricity supply. The residents’ evidence was also to the effect that there was no other satisfactory remedy.”

“Therefore, on the majority’s holding, the residents have satisfied all the requirements for an interim interdict and the appeal fails,” Justice Madlanga said.

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— Constitutional Court (@ConCourtSA) December 23, 2022

Eskom response

In a WhatsApp message, Eskom spokesperson Sikonathi Mantshantsha said the utility has taken note of the ConCourt judgment.

“Eskom will abide by the Constitutional Court decision while exploring measures to safeguard its best interests in the matter,” he said.

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