Johannesburg Appeals High Court Order to Settle R1.1 Billion Debt to Eskom

The City of Johannesburg (CoJ) and City Power have announced their decision to appeal a High Court order requiring them to settle a R1.1 billion debt to Eskom. This appeal follows a ruling on Thursday, 20 June 2024, by the Johannesburg High Court mandating the payment for various unpaid electricity bills.

In their statement on Friday, 21 June 2024, the CoJ reiterated its claim that Eskom owes City Power R3.4 billion, emphasizing the complexity of the dispute and the need for a thorough resolution process. “The City and City Power believe that critical aspects of the evidence were not fully considered by the court in reaching its conclusion,” the statement read. They also expressed their respect for the court’s decision while reserving the right to appeal.

The CoJ has accused Eskom of avoiding efforts to mediate and resolve the issue through Inter-Governmental Relations processes. “Eskom bypassed these avenues and rushed to court to seek a resolution,” the CoJ stated.

Eskom’s revenue manager, Susan Smith, in a sworn statement, indicated that City Power had been deferring its debt to Eskom since October 2023. She highlighted that Eskom’s intention was for the CoJ to organize its finances and settle its acknowledged debt. “Despite Eskom’s best efforts to accommodate the City of Johannesburg, the matter has reached a point where Eskom can no longer afford to accommodate the CoJ without harming its own business,” Smith said. She emphasized that Eskom, not being a bank, lacks the financial capacity to subsidize the CoJ’s electricity debt exceeding R1 billion.

Invoices presented to the court in May 2024 showed that City Power’s debt to Eskom consisted of four invoices from earlier in the year, with one invoice alone amounting to nearly R500 million. Eskom stated it had no choice but to seek a declaratory order from the court to compel City Power to pay its debt.

While acknowledging its debt to Eskom, the CoJ claims Eskom owes it R3.4 billion due to unresolved overbilling issues dating back to 2021. City Power noted that Eskom has admitted potential billing inaccuracies and has refunded at least R483 million over recent years. Despite these refunds, Eskom has refuted City Power’s overbilling claims, asserting that this does not absolve City Power of its responsibility to pay bulk power bills.

Johannesburg’s Member of the Mayoral Committee (MMC) for Finance, Dada Morero, expressed a preference for resolving the dispute through an independent mediator rather than the court system. “The City is committed to the appointment of an independent mediator to resolve the current impasse between City Power and Eskom,” Morero stated, noting that the matter remains before the courts.

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