- Eskom issues notice to reduce, interrupt or terminate electricity supply to certain Johannesburg bulk supply points.
- City of Johannesburg and City Power owe Eskom more than R5.2 billion in arrears, excluding a further R1.58 billion current account due in June 2026.
- Utility says rising municipal debt threatens its financial sustainability and ability to supply affordable electricity.
South Africa’s state owned utility Eskom has issued a formal notice of its intention to reduce, interrupt and/or terminate electricity supply to certain bulk supply points servicing the City of Johannesburg and City Power after arrear debt escalated to more than R5.2 billion.
The move comes less than a year after Eskom and City Power announced a breakthrough agreement aimed at resolving a long running electricity billing and debt dispute valued at more than R5 billion.
In June 2025, the two parties reached an agreement under which City Power committed to paying R3.2 billion to Eskom over four years, while Eskom agreed to write off R830 million in penalties, interest and related costs.
At the time, South Africa’s Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, described the deal as a model that could be replicated by other financially distressed municipalities.
However, Eskom says the City of Johannesburg and/or City Power have once again defaulted on their obligations under the Electricity Supply Agreement.
According to Eskom, the metro currently owes arrear debt of R5.25 billion, excluding a current account of R1.58 billion due on 5 June 2026. The utility said it has spent more than two years working with the municipality to support compliance with payment obligations.
Eskom stated that repeated defaults and continued non-payment have left it with no option but to begin the process of reducing or interrupting supply to selected bulk electricity supply points.
National Treasury has classified the municipality as effectively bankrupt, with creditors owed approximately R25.2 billion against available cash reserves of only R3.9 billion. Finance Minister Enoch Godongwana has met with Executive Mayor Dada Morero as Treasury pushes the city to address what it considers an unsustainable wage bill and worsening financial instability. Read more
Eskom said it is unacceptable that municipalities continue collecting electricity revenue from customers while failing to transfer payments owed to the utility. It warned that escalating municipal debt is undermining efforts to strengthen its balance sheet and maintain affordable electricity tariffs.
The utility added that revenue growth depends on collecting outstanding electricity debt and improving payment discipline across municipalities and metros.
Eskom said several municipalities are already working with the utility to develop sustainable debt solutions. On 5 May, Eskom announced that nine municipalities had secured council resolutions to sign Distribution Agency Agreements following consultation processes.
The Distribution Agency Agreement forms part of Eskom’s Active Partnering initiative and is designed as a long term but non-permanent arrangement between Eskom and municipalities.
Under the framework, Eskom can provide technical and financial support services, including smart meter installation, skills development and revenue collection on behalf of municipalities. The initiative is intended to restore operational sustainability and improve electricity distribution performance across struggling local authorities.
Author: Bryan Groenendaal
2 Comments
City Power is s mess.
They should start insourcing their whole operations and get rid of all contractors who either repair and re-disconnect customers and demand payments from them.
They are loosing millions of raids every month because of these renegades. We the customers/redidents ate not idiots.
If municipalities don’t pay their dept what is the use of smart meters then they still won’t pay up debts, and always a method of by passing meters as the municipalities don’t have funds to reroute their cabling for each business,houses etc. Just one broken egg towards municipalities.