Wednesday, 14 October
2020: In a judgement
delivered by the South Gauteng high court on Tuesday 13 October 2020, the court
affirmed Eskom’s right to interrupt or terminate electricity supply to
non-paying customers. This case was brought against Eskom by Pioneer Foods, in
which it had sought to review and set aside Eskom’s 2018 decision to interrupt
electricity supply to the Walter Sisulu Municipality due to its failure to pay
for electricity supplied in terms of the municipality’s agreement with Eskom.
The court ruled that
Pioneer Foods had no standing in the electricity supply agreement between Eskom
and the municipality, and dismissed the application with costs. Pioneer Foods
is a customer of the municipality, and as such had no legal right (locus
standi) to bring the case against Eskom to court.
This is a landmark
judgment affirming the validity and lawfulness of Eskom’s rights, powers and
entitlement to invoke section 21(5) of the Electricity Regulation Act of 2006
to interrupt the supply of electricity to a delinquent customer, in this case
the Walter Sisulu Municipality in the Eastern Cape.
Eskom welcomes this
landmark judgment as the court has set the important legal principle that Eskom
is only obliged to supply electricity to paying customers.
The Electricity Regulation Act of 2006 entitles Eskom
to interrupt electricity supply to a non-paying customer and in this matter
Eskom had taken proper preliminary steps and due process which did not entitle
the applicant to the interim interdict.
The court also held that Eskom’s interruptions of
supply to the defaulting municipality were important and necessary for Eskom’s
survival as Eskom could not be expected to continue supplying electricity to a
non-paying customer.
Pioneer had an available
internal remedy which entailed lodging a dispute with Nersa. The Court held
that before an aggrieved party approached the Court for relief against Eskom,
it should demonstrate that it first exhausted the internal remedies
contemplated by the Electricity Regulation Act by approaching Nersa.
The relationship between Eskom and the municipality is
reciprocal in that Eskom supplies bulk electricity against payment.
Having
received the judgement, Eskom is now in a position to enhance its collection
efforts from defaulting municipalities, who collectively owe Eskom in excess of
R31 billion in overdue debt.
ENDS