No pay, no power: Eskom turns off electricity

By Staff Writer
Eskom is turning off electricity until outstanding accounts are paid, in both the Free State and Gauteng. This is due to Eskom trying to make up for mountains of debt, even after a R50 billion cash injection from Treasury as well as higher electricity rates.
The City of Tshwane has taken to more drastic measures in order to recuperate some of its debt.
"After a protracted and lengthy impassioned plea to our customers to pay for their municipal services fell on deaf ears, we were left with no option but to embark on a drastic and unprecedented course of action to disconnect services to all accounts that are in arrears in a bid to recover R6, 6 billion of outstanding debt owed to the City of Tshwane," said the city in a statement.
Furthermore, the collapse of a coal storage silo at Majuba power station in Mpumalanga, and subsequent load shedding thereafter, has highlighted that Eskom has more than just money problems.
Schools lights turned off
The Tshwane municipality started to turn off schools electricity on 6 November as 140 schools accounts were in arrears.Since then, Jason Ngobeni, the city manager of Tshwane, said he has received a written commitment from the Department of Education in Gauteng in which they undertook to settle the account of the schools whose accounts are in arrears.
"It's not a nice thing to cut off anyone, whether it's a school, residential customers, businesses or government departments or embassies, however, disconnecting electricity seems to be the only viable method to recoup our money," said Ngobeni.
Businesses were in total arrears of R1, 36 billion, while residential arrears came to R2, 95 billion, and provincial government departments owed the city the most at R339, 2 billion.
Free State power crisis
Last month Free State municipalities also had their power cut off, as they owed Eskom R736 million.
"Not only have they not come up with a plan in the next six to 18 months, the problem is they also haven't been paying their current bills," said Eskom spokesperson Anthony Stott.
Stott said Eskom gave the municipalities notices in May, and that interventions and negotiations had been taking place between the provincial government and the utility since then.
Historical debt
Another way in which municipalities are collecting debt is by charging the new owners of a house the old owner's debts. If they do not comply, then their electricity is switched off.
This is called 'historical debt'. Historical debt is any debt associated with a property including for example rates, electricity and water. When a house is sold and ownership has changed, the debt attached to the property changes hands too.

Recent Articles

Featured When should you invest rather than save?

Extra cash left at the end of the month? We have a look at the differences between saving and investing, and we find out how you should decide which one to pursue.

Investing for your retirement – which product to use?

Retirement annuities (RAs) and tax-free savings accounts (TFSAs) - which is better when planning for your retirement?

3 Reasons for early entry to a retirement village

Your parents may envision their golden years on the porch of your childhood home. However, it’s good to look at the benefits of joining a retirement village.

What do activist investors aim to achieve?

If you had the financial means to invest in a company so that you can enact the change you want to see in the world, would you do it? There is a growing group of individuals who would, and these are known as activist investors.

Latest Guide

Guide to debt rehabilitation solutions