City Power, Eskom reach R3.2 bn debt payment deal

Electricity Minister Kgosientsho Ramokgopa announced this development on Tuesday.

The two entities had been at loggerheads over the more than R4 billion debt, with Eskom ultimately threatening to plunge the metro into darkness if it did not pay.

For its part, City Power accused Eskom of overbilling, casting doubt on its billing system during times of load shedding when bulk supply was cut off.

The long-standing dispute eventually reached the country’s courts.

READ: Court dismisses Eskom's application amid bill dispute

Prompting Ramokgopa to appoint the South African National Energy Development Institute (Sanedi) to investigate and compile a report on the challenges standing in the way of an amicable debt solution.

“Johannesburg City Power will pay the R3.2 billion over four years. It’s important that there’s an appreciation that this is a big ticket of R3.2 billion. Of course, that amount has been in dispute. I want to emphasize that City Power and the City of Johannesburg have done everything possible to maintain paying the current despite all these difficulties.”

He said over R800 million in interest and penalties would also be written off.

“We’ve been able to write off R830 million. That comes as a result of them not having to pay interest on what is owed. I mentioned that Eskom had conceded with regards to the estimation during load shedding, and also the penalties that have to do with notifiable maximum demand,” Ramokgopa added.

The metro’s executive mayor, Dada Morero, welcomed the agreement.

“City Power and Eskom are also happy so it’s just a matter of now implementing the agreement as reached. We also welcome the winter matter, as agreed with Eskom, to actually give some relief during the winter months.”

The City will be exempt from paying the debt during winter, when it cushions consumers from tariff spikes as demand increases.

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