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

Bloemfontein - Eskom has agreed to suspend the disconnection of bulk electricity to Free State municipalities, the power utility said on Friday.

“An agreement has been reached that allows for further detailed engagements and development of payment plans by all affected municipalities during August 2014,” Eskom said.

The disconnection was planned to start on Monday.

No details on the agreement was available.

The Democratic Alliance welcomed the agreement between Eskom and the Free State provincial government on the municipal electricity debt.

However, the DA's David van Vuuren said the municipalities were unable to manage their finances.

“Free State municipalities are unable to manage their finances appropriately. They also fail dismally in the collection of outstanding revenue from residents,” Van Vuuren said.

“Last year Free State municipalities failed to collect more than R5.4 billion in household debt. Paying residents cannot be held responsible and threatened with suspension of services because of the incompetence of municipalities.”

He said Eskom's non-payment by municipalities for services rendered should be dealt with by the cabinet.

The Free State provincial government was not in a healthy financial situation, he said.

“The Free State, at local and provincial government level, is heading towards a financial crisis,” Van Vuuren said.

“ The current state of affairs is indicative of an embedded culture of unaccountability, lack of transparency and recklessness within municipalities and provincial departments.”

In September last year, Eskom published a notice that it was planning to disconnect electricity to the Maluti-A-Phofung municipality, which failed to settle a bill of more than R205 million.

Some of the money was outstanding for more than 90 days.

Eskom planned to disconnect power to the municipality on December 4, 2013.

Towns and municipal areas affected would have been Harrismith, QwaQwa, Kestell, Tshiame, Phuthaditjhaba, Tsheseng, and Witsieshoek.

A similar notice was published for the Ngwathe municipality, which apparently owed more than R188m.

Towns and areas affected by this notice were Edenville, Heilbron, Koppies, Parys, Phiritona, and Vredefort.