Cape Town - 121022 - South African power utility Eskom has applied to more than double the price of its electricity over the next five years. The state-owned utility said it has applied for a 16 percent annual increase for five years from April 2013 to March 2018. Many South Africans are struggling with the current cost of electricity. Pictured is teacher Michael Guzana with his son Hluma Guzana. Reporter: Yolisa Tswana PICTURE: SUPPLIED

Johannesburg - City Power does not owe Eskom R1.08 billion, the subsidiary said on Thursday.

“We would like to place it on record that City Power, like any other entity, purchases electricity from Eskom which it on-sells to its customers across Johannesburg,” managing director Sicelo Xulu said in a statement.

“City Power in turn pays Eskom on or before the due date which is a practice that is done in the normal course of doing business.”

On Wednesday Eskom said municipalities owed it a total of R11.4bn at the end of last month, but only R2.7bn of that was in arrears.

It was responding to questions on reports that municipalities around the country owed Eskom R10.8bn at the end of June this year.

This total was given by Co-operative Governance Minister Pravin Gordhan earlier this week in a written reply to a parliamentary question.

In his response Gordhan said the biggest debtor was City Power, which owed R1.075bn.

Xulu dismissed reports that City Power was in arrears.

“These media articles misrepresented the facts and created a false perception that City Power was in arrears. The utility makes its monthly payments to Eskom on time every month,” said Xulu.

In its dealings with Eskom and all of its suppliers, City Power was guided by corporate governance principles and accepted business practice, added Xulu.

“We are engaging with the authorities in this matter to ensure they have correct records on this matter. We have always enjoyed a constructive and professional relationship with Eskom and all our suppliers and we look forward to continued meaningful relations with all our stakeholders.”