Eskom has instituted scheduled power cuts in five municipalities that have not settled their electricity debt and declared that it cannot favour compassion over its balance sheet.
Eskom has been threatening to take action against defaulting municipalities since April 2015 for spiralling municipal electricity debts totalling R10-billion and on Monday carried out its threat.
“Eskom is not the Vatican, meaning even though we are expected to be compassionate, which we are from time to time, you cannot expect Eskom to just write off the debt or continuously give grace periods,” said Eskom spokesperson Khulu Phasiwe.
Last week Eskom successfully defended its decision to cut power to municipalities in the high court in Pretoria after a bid to stop the move by civil rights group AfriForum.
AfriForum and its economic wing AfriBusiness approached the court to stop the disconnections of electricity in the Northern Cape, Free State and the North West.
In a statement, AfriForum said Judge Hans Fabricius found that municipalities ought to be held accountable and said ratepayers who have paid their electricity bills should query the power cuts with their councils and not Eskom.
AfriForum said the electricity cuts will further impoverish the unstable economy of rural towns.
It argued that Eskom has “other legal measures at its disposal to recover its fees” and that “to punish paying and law abiding citizens and institutions for the negligence of incompetent municipal administrations does not make sense”.
Stefan Pieterse, spokesperson for AfriBusiness, said small-town economies would bear the brunt of the electricity cuts. “Municipalities will generate less income because businesses will privatise their power supply or move to metros. At the end of the day the man in the street, not the businesses, are thrown to the wolves.”
A last-minute scramble to avoid the temporary electricity cuts in 34 municipalities led to 21 payment agreements being signed with Eskom by Monday night, after the Ventersdorp and Naledi municipalities were cut off during morning peak times.
The power interruptions to municipalities that have not settled their debt will take place from 6am to 8am and 5pm to 7pm. Weekend power cuts from 8.30am to 11am and 3pm to 5.30pm have also been scheduled.
The municipalities with the biggest debts to Eskom are in North West, the Free State and Mpumalanga, Phasiwe said. “The Free State owes Eskom R4-billion, Mpumalanga is next, with nearly R3-billion; then the North West, which owes just less than R1-billion.”
On Monday the Ventersdorp municipal council rapidly passed a resolution committing the local North West municipality to finalise a payment plan.
Later that day, two municipalities in the Free State and another in the North West reneged on an agreement to pay.
Speaking about these three defaulters, Eskom’s acting chief executive Matshela Koko said: “Time has come for the outstanding overdue debt to be honoured in full. Eskom is bent on ensuring that this happens for the sole benefit of not only Eskom but the entire South African economy.”
Eskom’s ability to collect municipal debt has regressed since 2014, when it first warned the Western Cape’s Kannaland municipality that it would cut power over an unsettled R20-million electricity bill.
It made a similar warning in 2015, when it threatened to cut power to 20 municipalities across the country. Since then, the state-owned company admits, that municipal debt has been increasing over the past few years.
“Debt collection in the municipal and residential segments remains a significant challenge, although the rollout of smart prepaid meters is assisting in improving revenue recovery,” it said in a statement.
Koko said he is empowered by the courts to do much worse.
“It cannot be overemphasised that relevant laws and agreements permit Eskom to effect 100% electricity disconnections upon non-payment, subject to the prescribed due processes,” Koko said.
“But we did not exercise this option.”