Advocate submits that Eskom’s action against Newcastle defies logic

Eskom’s decision to disrupt electricity defies logic, according to Joseph Nxusani, who represented Newcastle Municipality at the Pietermaritzburg High Court on October 3.

“If you are seeking to obtain payment, then how can you simultaneously also purport to obliterate that income stream? …No rational entity would resort to such conduct,” said Advocate Nxusani.

During the course of his argument to persuade Judge P Bezuidenhout to grant an interim interdict preventing Eskom from continuing with electricity interruptions due to non-payment to the energy supplier, Adv Nxusani accused Eskom of deliberately punishing residents in a manner intended to create a rift between residents and the municipality.

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“They (Eskom) have identified times when children are going to school, when policemen and security officers need to be at work and ensure services. The entire edifice of the community is being targeted at a time when it needs it the most. There is no explanation as to why they are choosing that particular time,” he elaborated.

The claim made by Eskom’s legal representative, Sydwell Shangisa, that the municipality profited R200 million per annum in electricity revenue, was hotly discredited by Adv Nxusani, who explained, “The people in the reticulation business would still have to be paid. The infrastructure of laying electrification reticulation services still has to be maintained. One must deduct all of those expenses.”

He went on to interrogate Eskom’s understanding of the Section 27 (i) of the Energy Regulations Act (ERA), which, according to Adv Shangisa, obligates the municipality to ring fence electricity revenue to ensure the municipality pays for this service as not doing so would be detrimental to ratepayers who have paid the municipality for their consumption.

“The price of electricity has gone up. In some instances, there is a high default rate and the municipality is unable to recover funds, therefore it is under increasing pressure to meet its obligation to render services,” stated Mr Nxusani. “If the municipality is earning R90 million and has to pay Eskom R72 million. How do they pay for the people that need cross subsidisation? This notion that the revenue must only be used for electricity is not the practice at a single municipality.”

“It is not that we are unwilling to pay. We simply cannot pay,” continued Adv Nxusani, before holding Eskom somewhat responsible for the poor payment factor in Newcastle East.

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Adv Nxusani raised the fact that due to residents in the East receiving electricity supply directly from Eskom, the municipality is unable to disconnect electricity supply to the large majority of customers who default on their municipal bills.

Furthermore, Adv Nxusani accused Eskom of applying a ‘Jekyll and Hyde approach’ when it, “Ignored the local newspaper and assumed that people in Newcastle have access to the national newspaper (in which it published its intention to take action against Newcastle Municipality for non-payment). It was by sheer accident that the municipal manager was able to get his hands on it. In this way they were appearing to comply with their obligations, while at the same time resorting to drastic action,” claimed Adv Nxusani.

In his closing argument in support of the interdict against Eskom, Adv Nxusani questioned why Eskom wasn’t taking action against Soweto Municipality, which owes the energy supplier R18 billion compared to the R

200 million owed by Newcastle Municipality. “Why don’t they go for those types of communities? Because they are scared? Because of politics? Why do they choose isolated and smaller municipalities?” asked Adv Nxusani.

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