City Power and the City of Johannesburg (CoJ) late on Thursday issued a sharp rebuke of Eskom issuing a notice of intention to cut off electricity at pre-determined times in some parts of Johannesburg because of an ongoing dispute over R4.9 billion in arrears.

The city called Eskom’s intentions — also issued via a statement on Thursday night — “unjust, counterproductive, and potentially harmful to the residents and businesses of Johannesburg”.

Eskom said City Power owed it R4.9 billion, excluding the current account of R1.4 billion, which is payable at the end of November.

But according to the city, it is in a dispute with the national power utility for overbilling of more than R3.4 billion.    

It alleges that Eskom has failed to provide clarity on the disputed billing charges, compelling the city to consider legal avenues to protect its interests.

“We urge Eskom to retract its public notice and engage in genuine, good-faith negotiations to resolve these issues constructively,” said City Power CFO Tebogo Moraka.

Moraka said Eskom’s “pay now and resolve disputes later” approach worsened financial strain on the city.

The city is consulting with its legal team to explore legal avenues to prevent any disruptions to electricity supply, he added.

“We urge Eskom to reassess its stance and engage with the city in finding a mutually beneficial resolution. In the meantime, the city has formally requested that Eskom retract is public notice within five days,” said Moraka.

In its statement, Eskom cited the outstanding debt and a pattern of delayed payments by City Power.

The national utility claims it issued the interruption notice under the Promotion of Administrative Justice Act (PAJA) as a final step after extensive but unsuccessful attempts to resolve the payment dispute.

Eskom said it had a responsibility to ensure an affordable and reliable electricity supply to the broader South African population, and that it could not sustain unpaid debts from municipalities without impacting service to other areas.

“When entities like the CoJ fail to pay Eskom timeously, or at all it forces Eskom to borrow additional money at premiums to fund operational costs. Operational costs should be funded by revenue generated by electricity sales and not by borrowing.”

It said that the PAJA process allows for formal representations, offering the City of Johannesburg an opportunity to present its case before the final decision is made.

Eskom said it would be issuing a public notice on Friday inviting “all interested and affected parties to submit written representations, comments, and/or submissions” indicating why it should not go ahead with the planned disruptions.   

Eskom has set 12 December 2024 as the date to announce whether it will proceed with the power cuts, based on feedback received.