Litigation: Municipalities want control of power distribution

Municipalities which feel aggrieved by their failure to generate income from electricity sales are approaching the Gauteng High Court (Pretoria) to declare electricity distribution an exclusive local government function and raise an extra levy for consumers who are direct clients of Eskom. This, a Rapport report notes, will cause dramatic increases for residents of townships, farmers, industries, and mines who currently buy their electricity from Eskom. The Association of South African Chambers (Asac) describes the court bid by municipality body Salga as another attempt to raise funds for looting.

The Mineral Council’s Henk Langenhoven also slammed the move as unsustainable for the mining industry, while AgriSA’s Christo van der Rheede said farmers cannot bear additional input costs for the benefit of municipalities. Salga also seeks a declaratory order that would enable municipalities to demand a service level agreement with Eskom on direct sales in the municipalities’ relevant districts. Such an agreement is expected to include a levy for the municipality and arrangements to cut electricity to Eskom consumers for debt control. Salga argues that it is ‘discriminatory’ that some consumers in their district pay different fees for electricity. The respondents in the court case are Eskom, the Ministers of Mineral Resources & Energy, Co-Operative government, Nersa and seven private electricity providers such as Sasol, SANParks and the AECI industrial group. Eskom, AECI and two other distributors already indicated that they will oppose the application.