By Lehlohonolo Lehana.
Eskom has suspended its Promotion of Administrative Justice Act (PAJA) notice of potential power interruption against the City of Johannesburg (CoJ) and City Power, which was issued on November 7.
This is to allow the independent expert hired to look into the issue of overbilling to submit a report to Electricity and Energy Minister Dr Kgosientsho Ramokgopa.
Following the Minister’s engagement with the city’s mayor, and executives from the CoJ, City Power and Eskom on November 11, an agreement was reached that an independent expert would be appointed to undertake a process to look into the disputed alleged overbilling of about R3.4-billion by November 25.
This deadline was subsequently extended to December 6 for the report to be delivered to the Minister.
The CoJ and City Power were expected to pay R1.4-billion for the September invoice, which was withheld in order for Eskom to suspend the PAJA notice.
Eskom reports that the CoJ and City Power have paid Eskom R1.3-billion, which is short of the agreed R1.4-billion.
Further, it says the October invoice of R1.3-billion that was due to be paid by November 29 remains unpaid.
Eskom says it will await for a report from Ramokgopa of the findings from the independent expert.
Meanwhile Eskom attached Emfuleni Municipality’s bank accounts to recover R8 billion in arrear debt after the municipality failed to comply with the Debt Relief Program.
The attachment of the bank accounts allows Eskom to receive payment for the electricity it supplies, ensuring continued service to the municipality’s customers.
The utility said that it had exhausted all legal and mediation avenues to secure payment for services rendered since 2018.
Sitting with an unsustainable R423 billion debt burden, Eskom received a R254 billion debt relief package over three years from National Treasury in 2023.
This was a program that required municipalities to settle their payments to the power utility.
In hopes of balancing the books, Eskom has submitted a request to the National Energy Regulator of South Africa (Nersa) for tariff hikes that would generate over R1.4 trillion in revenue for the 2026-2028 financial years.
The utility aims to achieve R446 billion in revenue for 2026, R495 billion in 2027, and R537 billion in 2028.
Proposed price increases for Eskom’ direct customers are substantial: 36.15% from April 1, 2025, to March 31, 2026; 11.81% from April 1, 2026, to March 31, 2027; and 9.10% from April 1, 2027, to March 31, 2028.
These hikes significantly exceed the current inflation rate.
Eskom argues that it needs a price increase for several reasons; including an 11.2% increase in primary energy costs (mainly due to coal), and the inability of the government to force municipalities to pay the R78 billion they owe to Eskom.
Eskom has also argued that the regulator, NERSA, has historically given it lower price increases than it needs, and this has contributed to its R400 billion debt.