City Power to pay R3.2bn in Eskom deal
by Kelebogile Matlou
Johannesburg residents have been given some relief after power utilities Eskom and City Power reached an agreement to resolve their long-running “electricity debt dispute”. Earlier this year, Eskom had threatened to cut electricity supply to the City of Johannesburg and City Power over an unpaid bill of R4.9 billion, along with R1.4 billion in current charges.
City Power, disputed the figure, arguing that Eskom had over-billed by more than R3.4 billion. This led the Minister of Electricity, Kgosientsho Ramokgopa, to appoint the South African National Energy Development Institute (Sanedi) to compile a technical report on the issue. The report was expected within six weeks, but according to the Minister, it was delayed due to the complexity of the matter.
At a press briefing on Tuesday, Ramokgopa announced that both utilities had agreed to a settlement of R3.2 billion, which will be paid over a four-year period. “Johannesburg City Power will pay R3.2 billion over a period of four years. It’s important to appreciate that this is a significant amount, and City Power and the City of Johannesburg have done everything possible to maintain payments on the current account,” Ramokgopa said.
He said despite all these difficulties of course there will be challenges from one month to the other but the issue in dispute remained in dispute until we resolved this matter. He also revealed that R830 million of the original debt was written off due to meter reading failures caused by load-shedding.
“First, we were able to confirm that there are issues that have to do with the impact of load-shedding. This period also spanned the period when we had intense load-shedding. Where there is an absence of metering, you are doing estimates and you can imagine you will not be accurate, I think one of the lessons going into the future is we need to ensure that there’s bulk metering so that when there’s load-shedding it reads zero,” he said.
Executive Mayor Dada Morero acknowledged the tough negotiations but praised the commitment of all stakeholders in finding a workable agreement. “The process that we undertook from November, yes it had its challenges but we want to acknowledge the work that the team put in place to ensure that at the end we can arrive at a settlement that we can all be comfortable with,“ Morero said.
