Eskom scores big legal victory over municipalities who refuse to pay electricity bills

South Africa’s power utility, Eskom, has scored a legal victory against delinquent municipal customers at the Supreme Court of Appeal (SCA).

The SCA on 9 March affirmed the power utility’s right to payment for services rendered to municipalities.

It ruled that the Letsemeng Local Municipality in the Free State province must pay Eskom all amounts, in respect of the electricity it receives from the power utility when it is payable.

The SCA further directed the municipality to pay to Eskom a portion of the equitable share that relates to electricity within 24 hours of receipt of the equitable share, pay all arrear debts due and payable to Eskom in accordance with the terms of the acknowledgement of debt and payment plan.

The Letsemeng Local Municipality has also been ordered to pay the R5 million National Treasury had made available for the payment of its electricity debt.

Eskom said the outstanding debt owed by the Letsemeng Local Municipality had since jumped to R108.5 million at the end of February 2022 despite several agreements by the municipality to discharge its debt obligations to Eskom.

Spokesperson Sikonathi Mantshantsha said the ruling by the SCA assured the public that it will continue with its efforts to recover the debt owed by delinquent municipalities

“The SCA was also critical of the dishonesty of the municipality in its dealings with Eskom which it described as disgraceful. The court awarded costs against the municipality.”

Mantshantsha said the SCA also found local government is required to strive, within its financial and administrative capacity, to achieve, among others, its object of ensuring the provision of services to its community in a sustainable manner.

“Electricity is an important basic municipal service which local government is ordinarily obliged to provide. Eskom is obliged to supply bulk electricity to Letsemeng and Letsemeng is obliged to pay for this service.”

Mantshantsha said the SCA also ordered that the Letsemeng municipality must pay Eskom the money that it owed within 30 days of receiving the relevant invoice or statement.

“The Supreme Court has now upheld Eskom’s entitlement to receive payment from all municipalities for the electricity is supplies to them and it of course a well-known fact that municipalities Eskom more than R44 billion in unpaid which is Eskom is committed to recovering and will do everything that it can.”

Eskom has welcomed the ruling by the Supreme Court of Appeal to hold municipalities to account for the electricity debt they owe the power utility.

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