Dark days beckon for residents as Eskom warns to reduce electricity supply because the Govan Mbeki Municipality fails to keep their payment agreement. Eskom placed an advertisement in the Ridge Times of March 6 to warn residents and the municipality that this will take effect on May 8.

This comes after several interventions from Eskom’s side to get the municipality to pay. Govan Mbeki Municipality’s growing electricity account is in arrears with more than R6b. The municipality was even part of a debt relief programme, introduced in March 2023 by the National Treasury, but the municipality failed to keep to the agreement.

With this programme, Eskom agrees to write off the municipality’s debt over three years, but on the condition that the municipality pays its current debt. If the municipality kept to the conditions, they would not have had any further growing debt.

Govan Mbeki Municipality managed to let its debt grow by more than R2b since becoming part of the relief programme in August 2023. Eskom will now terminate the municipality’s participation in this programme by April 1.

If the municipality can resolve to conclude the distribution agency agreement with Eskom by March 27, Eskom will review this matter again.

This agreement is part of the IRFA orientated interventions, which will allow Eskom to help the municipality with services such as technical skills development, maintenance and operations of the municipal electricity network, energy loss management, pricing and tariff structuring, billing function and revenue management and collection.

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Management of Eskom also suggested that the municipality’s electricity supply be converted to pre-payment, where Eskom only supplies electricity equivalent to what the municipality can afford.

Another option Eskom suggested is that consumers in the Govan Mbeki municipal area pay Eskom directly for electricity according to the Eskom tariffs. Eskom management said Eskom has the right to exercise its statutory powers to interrupt or reduce bulk electricity to the municipality because of failure to pay.

Hennie Bekker, AfriForum’s district coordinator, said he does not see consumers paying Eskom directly as a solution.

“Eskom does not have the capacity to distribute the electricity and to manage the payments,” said Bekker.

He is of the opinion that another energy provider would be able to do the job better and ensure that consumers get the electricity that they pay for. Bekker uses solar panels and does not use Eskom electricity anymore, yet Eskom sent him a bill of R25 000.

“Apparently, they use estimated readings, and this is their explanation for sending me such a high bill. My electricity meter has been standing still since I went over to using solar panels. If I paid that R25 000, would Eskom have paid me back?”

Bekker referred to the small town of Frankfort in the Free State, which started their own solar farm. Rural Free State is managing the electricity. “It would be a better solution than buying electricity directly from Eskom.”

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AfriForum is also fighting the battle of the planned 12% increase in electricity tariffs. AfriForum sent a formal letter of demand to Eskom whereby they urge Eskom not to go ahead with the planned reduction of electricity supply to Govan Mbeki Municipality.

AfriForum stated in this letter that this plan of Eskom, is unlawful.

“It goes hand in hand with strict legal prescriptions, under which a feasability study that must be done, as well as public participation according to Act 78 of Municipal Structures Act and also Nersa must give its approval for this agreement,” said Bekker.

“Eskoms’s current strategy does not comply with all of this.”

AfriForum also sent a letter to Nersa, who is supposed to play a central role in this scenario. In this letter, AfriFroum demanded that Nersa give confirmation of written notice to any municipality that Eskom can reduce the electricity supply and demand that Nersa exercise its rights to prevent Eskom and any municipality get into an agreement without following the legal procedures.

Fiona Pelman, DA councillor in Secunda sent a message on Friday assuring residents in her ward the lights will stay on.

“Feedback received from our provincial leaders is that the premier and MEC made it clear here will be no cuts from Eskom.”

Residents can send suggestions or their comments to Eskom by sending an email to CSMpumalanga@eskom.co.za. The spokesperson of Govan Mbeki Municipality, Donald Green, said the municipality is currently facing a severe financial crisis, as its debt to Eskom has reached over R6 billion.

“The municipality paid R32 million to Eskom in January, which is below the full current monthly billing due to severe cash flow constraints. Limited revenue collection and competing operational obligations prevented the full settlement of the account; as a result, interest continues to accumulate.

“The debt relief was conditional, and GMM failed to qualify because it did not pay its current monthly invoices in full—a mandatory requirement for the write-off of old debt. Consequently, GMM is operating on an unfunded budget where expenditures far exceed income.

“The municipality has struggled with low revenue generation and high distribution losses, which prevent it from having enough cash to cover both operating costs and bulk Eskom payments.

“A significant portion of potential revenue is lost to technical and non-technical electricity losses (illegal connections), meaning the municipality never receives the money it needs to pay Eskom for the bulk supply.

“To address the Eskom debt, the municipality is rolling out new electricity meters to reduce losses. While GMM owes billions to Eskom, it is also owed roughly R4.5 billion by residents, businesses, and government departments.

“Under the Municipal Systems Act, councillors and employees cannot be in arrears for more than three months; legal mechanisms exist to deduct these debts directly from their salaries. While personal utility bill totals are not public record, allegations regarding the Executive Mayor’s personal utility debt have been raised in political forums.

“However, no official, verified municipal document currently lists a specific amount owed by the Executive Mayor. As part of the recent strategic planning session outcomes, the Executive Mayor has set up a committee to address the Eskom debts and must present weekly reports.

“Further details on the Eskom matter will be deliberated by Council in a formal sitting,” said Green.