EASTERN CAPE NEWS - The Makhanda High Court has issued an interim interdict that prevents Eskom from interrupting its electricity supply to Willowmore, Steytlerville and Jansenville, with immediate effect.
The order, delivered by Judge Justin Laing on 17 June, ensures that the power remains on while the broader dispute between the municipality and Eskom is being settled in full.
Laing granted a rule nisi, calling upon Eskom and the other respondents to show cause why this interim order (pending the outcome of part B of the application (more details below)) should not be made final.
Eskom’s notices and escalating debt
The dispute arose when Eskom notified the municipality on 3 March of its intention to interrupt bulk electricity supply due to persistent non-payment of electricity debt. At that stage, the arrears had reached nearly R910m.
A public notice was issued on 6 March, citing the municipality’s failure to comply with the conditions of National Treasury’s Municipal Debt Relief Programme, to which the municipality was admitted on 19 December 2023.
Under this programme, Eskom could write off municipal debt in stages, provided that strict conditions, including consistent payment of current accounts, were met.
However, according to Eskom, the municipality failed to comply with these conditions.
The 6 March notice invited comment by 13 April and set out three options: the municipality could resolve to conclude a Distribution Agency Agreement (DAA) with Eskom, have the supply converted to a pre-payment arrangement, or allow consumers to pay Eskom directly.
Eskom warned that failure to act would result in an interruption of supply from 8 May.
The municipality’s response
The municipal council convened on 25 March to consider Eskom’s ultimatum. It resolved to seek legal advice before taking any further steps, to continue participating in the debt relief programme while engaging in negotiations regarding the DAA, to prepare and submit a financial recovery and repayment proposal to National Treasury in respect of the Eskom debt, and to implement the procedure under Section 78 of the Municipal Systems Act regarding electricity distribution, before taking a decision on the DAA.
On 27 March, the municipality reaffirmed its commitment to engagement, but demanded that Eskom withdraw the public notice.
It warned that if Eskom failed to do so by 1 April, it would declare a formal dispute under the Intergovernmental Relations Framework Act (Irfa) or institute urgent proceedings.
When Eskom refused, the municipality declared a dispute on 13 April, insisting that the Irfa process had not been concluded and that it had neither received a draft DAA nor clarity regarding its terms.
The matter came up in court as a two-part application. Under part A, the municipality sought interim relief in the form of two orders: the continued supply of electricity to Willowmore, Steytlerville and Jansenville, and the convening of a meeting in terms of section 42(1) of the Irfa.
Under part B, it sought the review and setting aside of Eskom’s decision to interrupt the electricity supply.
Eskom’s position
Eskom countered that the municipality had consistently failed to pay its current account despite collecting revenue from consumers. It claimed that electricity income was diverted to salaries and other creditors, leaving about R532m unpaid over three years.
Eskom maintained that its notices were lawful credit control measures, not linked to historic debt disputes, and that the municipality was not entitled to receive electricity without payment.
In its counter-application, Eskom sought an order compelling the municipality to comply with its obligations under the Electricity Regulation Act and to ring-fence electricity revenue for payment.
However, the court struck Eskom’s counterclaim from the roll, finding that it had not demonstrated sufficient urgency for the matter to be heard together with the municipality’s application.
Court’s findings
Laing noted that while Eskom is entitled to enforce credit control measures, the municipality had demonstrated a prima facie right to uninterrupted supply given the devastating impact that disconnection would have on essential services.
The court criticised the municipality’s delay in bringing the application, describing the urgency as partly self-created.
However, it emphasised that the constitutional implications - particularly the delivery of basic services to vulnerable communities - justified intervention.
The interim interdict ensures continued electricity supply while the legality of Eskom’s notices, the municipality’s debt obligations and the proposed DAA are fully considered.
This means that the lights in Willowmore, Steytlerville and Jansenville are set to stay on for now, while the broader battle over the municipal debt and electricity distribution remains far from resolved.
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