Why Eskom doesn’t want to give Cape Town total control of power distribution Daniel Puchert

Eskom has said that it has reconsidered its approach to several municipalities requesting to take over their electricity supply.

The power utility said this has to do with the current legal separation of the company and the amount of debt owed to the power utility by other municipalities.

Its statement comes after Cape Town mayor Geordin Hill-Lewis said Eskom had withdrawn from talks to negotiate the city taking over its power supply.

This would allow the city complete control over the distribution and sale of electricity but still rely on Eskom’s supply to this grid.

Hill-Lewis said this would be primarily skewed in Eskom’s favour as they would only have to service one customer (Cape Town) rather than all of Cape Town’s residential areas.

The City of Cape Town released a statement saying that Eskom had decided not to transfer or sell any assets to the city due to operational requirements of the Eskom business.

Eskom also said it wouldn’t be in its interests to do so.

MyBroadband asked Eskom to clarify its remarks to the City of Cape Town, and the power utility said it would be open to adhering to a standardised approach formalised through a legislative process.

“This is especially pertinent as Eskom is undergoing a legal separation into three entities: Generation, Distribution, and Transmission,” Eskom said.

It noted that Cape Town was not the only municipality looking to take over areas currently supplied by Eskom.

Given that “several municipalities have requested to take over areas currently supplied by Eskom,” this could prove a significant threat to the company’s distribution entity — especially in more lucrative areas.

Eskom also faces the challenge of assuming control over some municipalities’ networks due to their debt to the electricity provider.

It said that municipal debt had ballooned to R74.4 billion by the end of March 2024. Eskom said this poses a major threat to its operational capability.

This would put them in an even worse position if they ceded control of areas that paid on time and were left with municipalities and other customers who struggled to make timely payments.

Cape Town has been finding alternative forms of electrical supply, saying it aims to reduce dependency on Eskom through various programmes.

The city started allowing households to apply to earn cash for excess power generated by their solar PV systems as part of their cash-for-power programme.

It also recently awarded a tender for its first solar plant, the Atlantis solar photovoltaic plant, which is scheduled to start construction in August.

SOURCE:Why Eskom doesn’t want to give Cape Town total control of power distribution (mybroadband.co.za)