The Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa and Johannesburg Executive Mayor, Mr Dada Morero yesterday announced the successful resolution of the billing dispute between Eskom and the metro’s entity, City Power. The billing dispute had the potential to undermine the security of electricity supply to the City of Johannesburg and its residents.
The Ministry intervened through an Inter-Governmental Relations process, where Eskom, and City Power were urged to negotiate in good faith and find an amicable resolution that was in the best interest of both parties.
The Ministry of Electricity and Energy appointed the South African National Energy Development Institute (SANEDI) as an independent technical assessor. SANEDI verified metering data from the bulk infeed points, applied Eskom’s approved tariffs, and analysed discrepancies and compiled a report that was accepted by all parties, which led to the settlement agreement.
Minister Ramokgopa and Executive Mayor Morero announced that City Power has agreed to settle the R3.2 billion arrear debt owed to Eskom, over the next four years.
Eskom had to make a concession to write off R830 million, accumulated over an approximate 10-year period, due to the reversal of notified maximum demand penalty exceedances, wheeling charges, estimation adjustments during loadshedding, rebilling, and VAT reversals.
"We wanted to give feedback to the rest of the country, on an instrument that we had initiated in November last year to ensure that we bring to bear the power of the Inter-Governmental relations and to ensure that service delivery continues uninterrupted.
Of course, the expectation is that City Power continues to maintain the current account. We are excited about this development," said Minister Ramokgopa.
The Minister indicated that the Department now has a template and IGR model that may be applied to other municipalities around the country.
SANEDI’s report findings confirmed the integrity of the metering systems and identified areas for improved billing practices. Both Eskom and City Power have committed to enhanced data-sharing, transparency, and a structured reconciliation of outstanding balances.
Executive Mayor Morero thanked Minister Ramokgopa for his leadership in the process to ensure security of electricity supply to the residents of the Johannesburg. "As the City of Johannesburg, we would like to express our sincere appreciation to Minister Ramokgopa for his commitment to get us to where we are today. The process we undertook from November, had its own challenges but we want to acknowledge the work put in place to ensure we arrive at a settlement. City Power and Eskom are happy with the settlement as outlined by the Minister. It is now a matter of implementing the agreement," said Mayor Morero.
SANEDI CEO, Dr Titus Mathe thanked Eskom, City of Johannesburg and City Power for their cooperation and reaffirmed their commitment to a stable and transparent billing process.
"I think in the report, we captured that there was a break in communication and so we are recommending monthly bilateral meetings, which were there before but were discontinued. We urge the parties to continue the data sharing protocol and that is something that will help to address the challenges," said Dr Mathe.
Eskom and City Power agreed to work on other infrastructure challenges that lead to load reductions such a vandalism and theft of infrastructure to minimise electricity loses. The two parties have also put in place protocols to deal with estimates.
Enquiries:
Tsakane Khambane
Spokesperson to the Minister
Cell: 0820845566
E-mail: tsakane.khambane@dmre.gov.za
Chris Vondo
Spokesperson to the Executive Mayor
Cell: 079 851 9908
Daphane Mokwena
Eskom spokesperson
Cell: 082 441 6501
Isaac Mangena
City Power spokesperson
Cell: 071 884 8273
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