DESPITE the on-going vote of no confidence motion to be tabled against Joburg Mayor Dada Morero, he has managed to end the billing impasse between Eskom and City Power.
The billing dispute prompted both Electricity minister Kgosientsho Ramokgopa and Morero intervene in a series of high-level engagements, to pay Eskom R3.2bn over four years.
Minister Ramokgopa said the resolution brings an end to a complex impasse that had posed a threat to service continuity in Johannesburg.
“City Power, I want to emphasise, has done everything possible to maintain and pay the current account even through all these difficulties,” he said, during media brief on Tuesday in Braamfontein, who also said municipal debt to Eskom has ballooned to R100bn
Ramokgopa said part of the settlement includes a significant concession by Eskom, which agreed to write off R830m related to estimated billing and penalties incurred during power cuts.
“Eskom has conceded in regard to the periods of loadshedding and the estimation and also the penalties that have to do with the notifiable maximum demand,” he said.
He said no interest would be charged.
“The expectation is to maintain the current account and we are very excited about this development,” he said.
This follows a probe by the South African National Energy Development Institute (Sanedi), brought in to assess discrepancies in how Eskom had billed City Power, particularly during periods of loadshedding.
“We have accepted that there are major challenges, not subject to Joburg only, with regard to tariffs during winter. Households and industries find it difficult to meet their obligations during this period and there will be relief,” said Ramokgopa.
“We are getting into a situation here in the country where we see new dimensions of the energy problem. The economy is not growing, and more and more of your customers are unable to pay. Industries are closing, and City Power is no longer collecting what it used to collect because people are defaulting,” he said.
Ramokgopa said the equation of debt is unsustainable.
“Residents owe City Power, and in return, Eskom is owed. By the way, the number for municipalities shows that households owe them close to R370bn, and when I was here [in November], municipalities owed Eskom close to R98bn. I’m sure that number is now over R100bn. That equation is unsustainable by any measure. Municipalities find it very difficult to collect because consumers are under financial strain,” he said.
City Power said it was happy the impasse has been reached with Eskom, but also sent a warning to those who do not pay services- will be disconnected.
Image (Electricity minister Kgosientsho Ramokgopa).
