Eskom power cuts loom as 14 municipalities face deadline
· The South African
Fourteen municipalities face a key deadline on Tuesday, 1 September, with none having concluded Distribution Agency Agreements (DAAs) with Eskom, according to National Treasury.
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The municipalities owe Eskom substantial amounts and have until the deadline to conclude agreements as part of efforts to address their debt.
Failure to reach an acceptable arrangement could expose municipalities to Eskom’s credit-control measures, including possible electricity supply interruptions.
However, the expiry of the deadline does not mean Eskom will automatically switch off electricity in all 14 municipalities on Tuesday.
Why the municipalities face Eskom action
Eskom began a formal consultation process in March when it started issuing notices under the Promotion of Administrative Justice Act (PAJA) to around 14 municipalities.
The utility said it had exhausted reasonable avenues through the intergovernmental relations process to address the growing debt.
Eskom selected the municipalities because they had not settled their accounts for at least 18 months, failed to meet conditions of National Treasury’s Municipal Debt Relief Programme or posed a significant financial risk to the utility.
The PAJA process gave affected municipalities and other parties an opportunity to make representations before Eskom considered further action.
Eskom warned that municipalities that failed to find solutions could face credit-control measures, including electricity supply interruptions at predetermined times.
Nine municipalities moved towards agreements
Eskom reported progress in May when nine municipalities obtained council resolutions to enter into DAAs.
They are Nketoana, Mpofana, Masilonyana, Nala, Ngwathe, Renosterberg, Thembelihle, Govan Mbeki and Kgetlengrivier local municipalities.
Eskom said engagements with the municipalities would continue over the implementation of the agreements.
Under a DAA, Eskom works with a municipality for a defined period to strengthen its electricity distribution operations.
Eskom says the agreements can assist municipalities with areas including billing and revenue collection, electricity infrastructure maintenance, reducing electricity losses and improving customer service.
The municipality retains its constitutional responsibilities for electricity services.
Some municipalities reached other arrangements
Not all the municipalities identified when Eskom started the process remain in the same position.
Eskom reached a payment arrangement with the City of Ekurhuleni, which resulted in the utility withdrawing its intention to interrupt supply.
Inxuba Yethemba Local Municipality agreed to a prepayment arrangement. Eskom supplies electricity according to the amount the municipality pays upfront.
Dr Beyers Naudé, Kai !Garib and Mamusa local municipalities faced further action after Eskom said it had not received proposals from them that provided a solution to their payment problems.
Eskom issued final notices to interrupt bulk electricity supply to the three municipalities, with interruptions initially due to start on 8 May.
Eskom subsequently suspended the planned interruptions to Dr Beyers Naudé and Kai !Garib because of court proceedings.
The utility said the interruption affecting parts of Mamusa would proceed according to a scheduled timetable.
What happens after 1 September?
It was reported on Monday that National Treasury said none of the 14 municipalities had concluded a DAA ahead of the 1 September deadline.
The South African Local Government Association (SALGA) previously asked Treasury to give the municipalities another six months to complete the process.
Treasury said it was considering information submitted in support of the request and would communicate its decision to the affected municipalities.
This means the deadline does not automatically trigger electricity cuts across all affected municipalities.
The next steps will depend on Treasury’s decision and the individual arrangements between Eskom and each municipality.
Municipal debt continues to climb
Municipal electricity debt remains one of Eskom’s biggest financial challenges.
Eskom said in May that outstanding municipal debt stood at R111.6 billion.
More recent figures put the amount at about R119 billion.
The 2026 National Treasury Budget Review showed that municipalities participating in the Municipal Debt Relief Programme owed Eskom R85.2 billion by December 2025.
Only 15 of the 71 municipalities participating in the programme had consistently complied with its conditions.
Treasury said government would introduce DAAs under which Eskom performs electricity distribution functions on behalf of defaulting municipalities to improve revenue collection, ensure current electricity accounts are paid and restore reliable services.
Municipalities that refuse the conditions face removal from the debt relief programme and become liable for the full amount of their debt.
With the 1 September deadline approaching, attention now turns to Treasury’s decision on the request for more time and what action Eskom takes against municipalities that have not reached an acceptable arrangement.