Firms reach deal with Eskom over power bills

File Photo. Picture: Ian Landsberg

File Photo. Picture: Ian Landsberg

Published Feb 22, 2017

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Pretoria – Three companies in the Lekwa Local Municipality in Standerton, Mpumalanga, have reached an agreement with electricity giant Eskom and their local municipality that they will pay their electricity bill directly to the state power supplier for the next two months.

In terms of the agreement made an order of court, Cofco South Africa, Standerton Oil Mills and Astral Foods can for now sidestep the municipality.

However, at the insistence of counsel for the municipality, the money for their electricity bills would be paid into the trust account of the Lekwa council’s lawyers, who would in turn pay it directly over to Eskom.

Asked by the court why such a long process had to be followed, Lekwa’s advocate said “for good accountability”.

Eight other companies, including Bridgestone SA, also obtained an agreement from Eskom that it would not, for now, disconnect the power supply to the Madibeng Municipality in Brits.

These agreements will remain in place pending the outcome of what is said to be a groundbreaking case before the Gauteng High Court, Pretoria, on May 2.

The aim was to try to find a solution to Eskom simply interrupting the power supply to municipalities which are in arrears.

The main application of May 2 comes against the backdrop of Eskom’s ongoing struggle to retrieve outstanding debt from municipalities for the supply of electricity.

Consumers pay their monthly electricity usage bills to municipalities, which are, in turn, obliged to pay Eskom.

But several municipalities across the country have fallen in arrears, which has resulted in Eskom either threatening to disconnect their power supply or, in some cases, institute load shedding.

These businesses want to try to find solutions to the problem. They will ask the court to set aside Eskom’s decision to interrupt the supply of power to these struggling municipalities.

In the case of Lekwa Municipality; it owed Eskom nearly R185 million in January this year.

Eskom threatened to interrupt the power supply to this area if the municipality did not pay up.

The companies said their power usage made up a big percentage of the power supply to the area, and if they paid Eskom directly, instead of Lekwa, the power giant would at least get some money in.

Eskom said it was happy with this arrangement.

The companies' gripes are similar to those of firms in Madibeng, which said a constant power supply was vital to their operations.

Gerrit Greyling, a manager at Bridgestone in Madibeng, said even a power cut of a few hours a day had disastrous consequences, not only for the company, but also for residents in the area.

It would mean that sewerage works would came to a standstill.

Sewage would not be pumped to the plant but instead spill over to the streets and taps would run dry. It would also affect the health and safety of the residents, he said.

According to Greyling, Eskom, that holds the monopoly to provide electricity, was obliged to find other, less drastic alternatives to force municipalities to pay their debt.

“It appears that Eskom did not consider the alternatives, but instead chose a drastic approach without allowing for meaningful participation by all,” he said.

Eskom, on the other hand, said it was entitled to interrupt the supply of electricity to municipalities in arrears and which didn't make a plan to pay up.

It said the municipalities had entered into a contract with Eskom and that it wouldn't interrupt any power supply as long as the contract was honoured.

Pretoria News

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