City Power and Eskomhave reached an agreement over their long-standing electricity billing and debt dispute.
The two parties have been in dispute regarding the amount owed to Eskom as debt and how the power utility bills City Power for bulk electricity supply.
Write off R830 million
During a media briefing on Tuesday, the Minister of Electricity and Energy, Dr Kgosientsho Ramokgopa, announced that:
• City Power will pay an amount of R3.2 billion to Eskom over the next four years
• Eskom will write off some R830 million in penalties and related costs
“We have accepted that there are major challenges with regards to tariffs during winter. There is a time of use and during winter, the tariff is particularly heavy, and households, industries and customers find it very difficult to meet their obligations. So, we have accepted that during winter periods, there will be relief in relation to the payment of the R3.2 billion.
“We have been able to write off that R830 million as a result of firstly, they don’t have to pay interest on that which is owed.
“Eskom has also conceded with regard to the load shedding estimations and also the penalties that have to do with notifiable maximum demand.
“So, all of those have been removed… totalling to R830 million and that’s the concession that Eskom has made,” Ramokgopa explained.
Template
The Minister said the resolution of the dispute between the two entities can be used as a template for other struggling municipalities.
“We are excited about this development. We also have something similar in Tshwane and as and when municipalities come forward, we will have these discussions on how best to provide a degree of relief.
“Of course there must be a case that is presented, accepting that Eskom has also got its obligations… they need to collect because they generate electricity.
“That costs money and they must recover that money from the end user to reinvest it back into their asset base and into the generation of electricity,” Ramogkopa added.
Does it sound like a fair resolution?
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