Eskom plans to disconnect Free State’s Tokologo Municipality over R328m debt

As municipalities’ multi-billion rand debt to Eskom continues to grow, the utility on Thursday delivered a disconnection notice to Tokologo Local Municipality in the Free State.

According to Eskom, though the municipality has been receiving payments from its customers, it has failed to pay the utility.

“The municipality is responsible for discharging a constitutional obligation but decides to withhold payments to Eskom.

“The decision by Eskom to proceed with the process of disconnecting the electricity supply is a measure of last resort to prevent the debt from spiralling out of control,” it said.

The municipality currently owes the utility R328 million for the bulk supply of electricity, excluding the current account of a further R3.6 million which became due and payable on 20 November 2024.

Last paid Eskom in 2021

Eskom said the last payment received from the municipality was R150 000 back in 2021, noting how it made an effort and explored all alternatives to accommodate the municipality.

According to Eskom, it had engaged with the municipality in October 2021 in the dispute resolution process chaired by the Head of Department of the Provincial Cooperative Governance and Traditional Affairs (Cogta).

“Several workstream meetings were held without any resolution.”

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In November of that year, the municipality stopped payments following the workstream meeting.

“On 15 September 2022, the municipality, through its attorneys, confirmed that they do not wish to participate in the Intergovernmental Regulations Framework Act (IRFA) process but rather pursue the dispute from the litigation point of view,” Eskom explained.

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Furthermore, the National Treasury introduced the Debt Relief Programme in March 2023 through Circular 124, within section 34(1) of the Municipal Finance Management Act, 2003.

“The Circular stipulates that Eskom is to write off the municipal debt over three years subject to, among other conditions, the municipality paying its current account henceforth.

“The Circular further provides that the municipality, by electing not to participate in the Debt Relief Programme, confirms its choice of not doing anything about its financial problems. The Municipality failed to apply for the debt relief,” it said.

Impossible mandates to fulfil

Eskom said the notice is in line with the Promotion of Administrative Justice Act for public consultation resulting from the R328 million unpaid debt.

“In terms of the Constitution and the IRF, the Municipality is supposed to cooperate and assist Eskom with fulfilling its mandate of ensuring that citizens have access to affordable electricity.”

The utility added that should it proceed with the disconnection, bulk electricity supply to Boshof, Seretse, Dealesville and Hertzogville will be interrupted daily from 31 January 2025 for a set number of hours per day.

“The municipality has breached these obligations by not paying Eskom for the bulk electricity it supplies, making it impossible for Eskom to fulfil its mandate,” it concluded.

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City Power’s unpaid debt to Eskom

In Gauteng, Eskom has granted City of Johannesburg (CoJ) and City Power an extension to settle their bill.

According to the Minister of Electricity’s spokesperson Tsakane Khambane, the minister granted City Power an extension until 06 December 2024 for the assessment and verification report regarding the debt dispute between Eskom and the regional power utility.

The original deadline for this report was set for 25 November 2024.

This follows a notice of intention from Eskom earlier this month to cut off the CoJ and City Power’s electricity supply at specific preset times of the day. CoJ and City Power are in a billion-dollar dispute with Eskom.

In a briefing on the Key Revision Number (KRN) prepaid meters programme on Wednesday, Minister Ramokgopa noted City power’s challenges.

“The last time I heard, and that was yesterday, they had not paid. I’ll share with you what the next steps are. The report will come, but we know that City Power also has tremendous challenges.”

Additional reporting by Faizel Patel

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