An independent mediator will be appointed to resolve the legal battle between Eskom and City Power.
This was announced by the City of Joburg Member of the Mayoral Committee for Finance, Dada Morero, in his budget speech at the council chambers in Braamfontein, on Tuesday.
Eskom claims that City Power owes the entity R1.073 billion, while City Power says Eskom owes it R3.32bn as a result of “grossly inaccurate billing on bulk purchase invoices”.
Morero told council members that an independent third party would immediately resolve the dispute and avoid lengthy litigation.
“On the dispute between City Power and Eskom, the city is committed to the appointment of an independent mediator to resolve the current impasse between City Power and Eskom – the matter is currently before the courts.
“As such, the aim of the mediation is to find a mutually acceptable settlement and avoid lengthy and expensive legal proceedings,” said Morero.
He said electricity was the metro’s largest source of revenue and was expected to generate R21.5bn – excluding new connections – which was a 12.1% increase from the previous financial year.
The city is proposing a 1% tariff reduction for tariff increase of 3.8%. Morero pointed out that the City of Joburg had the lowest property rates tariff increases among other metropolitans for 2024/25 financial year.
The electricity tariff increase is 12.7% and the water tariff increases by 7.7%.
City Power was allocated a R22bn operational budget, while R4.2bn is for a three-year capital budget.
Morero confirmed the city approved the Integrated Energy Resource Plan (IERP) to prevent over-reliance on Eskom; strengthen customer relationships, especially business and industrial customers; and counter continual load shedding.
He said the IERP was a plan to fast-track the provision of electricity in formal and informal settlements, and to develop and maintain electricity infrastructure for the power utility to generate revenue.
“City Power is pursuing a business sustainability drive in response to the changes in the power sector. Customers are switching and adopting new technologies and options. As a result, Eskom is becoming less dependable and more costly as a power source.
“This challenges City Power’s business model, sustainability and profitability. Understandably, customers can longer tolerate high tariffs for electricity.
“The micro-grid electrification programme expedites electrification of informal settlements and reduces the electrification backlog.
“Currently, there is an electrification backlog of 312 informal settlements, which still needs to be upgraded. City Power has rolled out a 1 megawatt micro-grid to supply amaRasta informal settlement in Alexandra,” said Morero.
The Star