Court rulings on Eskom and power cuts: National government can no longer evade the problem

27 January 2021

Recent court rulings that prohibit Eskom from cutting municipalities' power supply if the decision is deemed "irrational and unfair" and that require National Treasury to be involved in the process are sending a clear message to the national government that it can no longer evade the problem.

In the most recent judgement delivered in the High Court in Bloemfontein, the court found that municipal debt to Eskom must be settled through negotiations and in consultation with the National Treasury.

The FF Plus welcomes this step. Relevant legislation already stipulates that the provincial Executive Committee, the National Energy Regulator (Nersa) and the National Treasury must cooperate to find solutions to the debt disputes between municipalities and Eskom.

These legal requirements must now be complied with and the national government can and must step in to remedy the situation. It can no longer try to evade the problem or attempt to fix it in mere cosmetic ways, like appointed yet another task team which achieves nothing.

This extensive problem must be approached in an honest and holistic manner where all factors are taken into account. From historic debt to payment agreements and the failure of unsustainable debt repayment agreements that offer to real solutions.

The FF Plus welcomes the court ruling seeing as paying consumers and especially business enterprises that loyally pay their electricity accounts are unfairly and negatively affected by power cuts.

The court has now ruled that Eskom and the Nketoana Municipality (Reitz, Petrus Steyn, Ntha and Lindley) in the Free State have six months to resolve the dispute concerning Nketoana's outstanding debt to Eskom and that the dispute must be settled by means of negotiation.

Nketoana owes Eskom more than R300 million, but disputes the amount. In addition, the Municipality does not have the funds to pay the debt and blames it on financial mismanagement by “unscrupulous or corrupt” officials.

The FF Plus is of the opinion that this excuse will probably be used for every case of non-payment. Another reason is the incompetence of the officials who manage municipalities under ANC control.

The court's finding that it would be irrational of Eskom to disconnect Nketoana's power supply due to the Municipality's inability to pay will probably apply to most cases of non-payment and in effect, comes down to a countrywide precept for cases where money is outstanding to Eskom.

The FF Plus will, in all cases where it has some influence, put pressure on municipalities to tackle negotiations with all the relevant stakeholders head-on and to find workable solutions as soon as possible.

Issued by Michal Groenewald, FF Plus MP and chief spokesperson: Cooperative Governance, 27 January 2021