There is an underlying problem as far as Eskom is concerned and not a lot of noise is made about that. One can only speculate why there is a thundering silence about it since that would point a finger directly back to the ANC led councils and their poor financial management and obvious greedy fingers of execs in the pies. This is the reality:
Will Eskom cut supply to your municipality?
Eskom has taken the first steps towards cutting electricity supply to the top 20 defaulting municipalities that collectively owe it R3.68 billion for bulk electricity supply.The utility has announced its plans to cut supply to these municipalities from 6:00 to 10:00 and again at 17:00 to 21:00 every weekday; and 7:00 to 10:00 and 17:00 to 20:00 over weekends, starting in the middle of winter on June 5.
It started the formal process of informing all parties likely to be materially affected by the interruptions.
This follows National Treasury’s recent announcement that it is withholding money from 60 municipalities that persistently fail to pay Eskom and its other creditors on time. Treasury also stated its support for municipalities to disconnect electricity supply to government departments that are in arrears.
Eskom said at the end of March total municipal arrear debt amounted to R4.6 billion.
Eskom is increasingly struggling financially and is currently pulling all the levers in an effort to improve its liquidity and balance sheet. Government has indicated that it will not contribute beyond the R23 billion cash injection scheduled to be paid to Eskom during the current financial year.
Energy regulator Nersa has received an application for a retrospective adjustment of electricity tariffs for 2013/14 andEskom is expected to submit its proposal for a selective re-opener of the tariff determination for the three years from April 1 2015 to March 31 2018 soon. In a submission to local government association Salga, Eskom said it will apply for a total tariff increase of 25.3% for 2015/16.
Eskom has in the past threatened to disconnect defaulting municipalities, but political intervention in most cases prevented this from happening, without solving the non-payment issue. It remains to be seen whether government’s new appreciation of the severity of Eskom’s predicament will result in support of the utility acting decisively.
Eskom in a statement recognised that “the disconnection of electricity supply may cause undue hardship to consumers and members of the community, and may adversely affect the delivery of other services. However,” it said, “customer disconnection is always the last resort explored.”
Eskom said a list of defaulting municipalities will be published per province by April 30 2015 in local provincial media channels. “Consumers within the jurisdiction of a defaulting municipality will be given adequate notice in terms of the Promotion of Administrative Justice Act, no 3 of 2000, and will be given the opportunity to make written representations to Eskom.”
The list of the top 20 defaulting municipalities:
• Maluti-a-Phofung Municipality (Harrismith)
• Matjhabeng Municipality (Welkom)
• Emalahleni Local Municipality (Witbank)
• Ngwathe Local Municipality (Parys)
• Thaba Chweu Local Municipality (Lydenburg)
• Lekwa Local Municipality (Standerton)
• Govan Mbeki Municipality (Secunda)
• City of Matlosana Local Municipality (Klerksdorp)
• Naledi Local Municipality (Vryburg)
• Thabazimbi Local Municipality
• Msukaligwa Local Municipality (Ermelo)
• Lichtenburg Municipality
• Nala Local Municipality (Bothaville)
• Makana Local Municipality (Grahamstown)
• Madibeng Local Municipality (Brits)
• Randfontein Local Municipality
• Dihlabeng Municipality (Bethlehem)
• Nketoana Local Municipality (Reitz)
• Nama Khoi Local Municipality (Springbok)
• Westonaria Local Municipality
Nothing is said, though, about the debt of the big guns, Tshwane, Johannesburg, Durban and Cape Town.
While the major f/ups of Eskom can never be denied, they can also not be expected to keep the engines running of nobody is paying for the fuel. Of course the fatcats at the local councils will not suffer any hardship because they would most probably all have council funded generators at their houses.