Two groups of residents of the Lekwa (Standerton) and Ngwathe (Parys) municipalities have the right not only of access to electricity supplied by Eskom, but to enough of it to sustain the most basic human rights guaranteed in the constitution.
This was one of the findings made by acting judge Anthony Millar in the High Court in Johannesburg on Friday, when he granted an application from residents of the two municipalities and ordered Eskom to urgently restore electricity supply to recent, adequate levels.
He also hit Eskom and the two municipalities with punitive cost orders, citing Eskom’s uncaring attitude to the hardship its earlier decision to throttle electricity supply imposed on residents.
The two applications dealt with substantially the same issues and were heard together.
Eskom’s latest strategy thwarted?
Millar’s order casts doubt over Eskom’s latest strategy to deal with municipalities that owe it large amounts. The utility has in the last few months limited electricity supply to these two and many other municipalities in various provinces to contractually agreed but wholly inadequate levels that were set many years ago.
It embarked on this strategy after losing several court battles about the disconnection of such municipalities.
Eskom’s decision has forced the affected municipalities to implement localised load shedding daily, which at times even coincided with national load shedding imposed by Eskom.
According to the applicants this led to a human and environmental disaster with among other things, untreated sewage from hundreds of thousands of people running into the Vaal River, which is also the main water source for the whole of Gauteng.
The plight of residents who pay for electricity but suffer power cuts as a result of Eskom’s action against municipalities, which don’t in turn pay for the bulk electricity purchases from the utility, has been the subject of a lot of litigation.
The application by the Lekwa Ratepayers Association and the Vaal River Development Association was however the first dealing with Eskom’s throttling strategy.
The court heard that Eskom has for an extended period supplied more electricity to both municipalities than the 24 300 kilo-volt-amperes (kVA) agreed upon with Lekwa in 2008 and the 55 000 kVA agreed upon with Ngwathe in 2010.
Eskom did not limit the supply to this notified maximum demand (NMD) but imposed extremely punitive penalties. When municipalities fall in arrears, it charges interest at the prime lending rate plus 5%.
Although municipalities have the option in terms of the NMD rules to increase the NMD, and despite both municipalities submitting such applications, Eskom will not approve such applications if the relevant municipality is in arrears and fails to make large prepayments.
Millar pointed out that the municipalities have no alternative. Eskom has the monopoly on electricity supply.
“For as long as the NMD penalties and interest charges which Eskom levies on the municipalities exceed the cost of actual consumption, paying customers will be saddled with hopelessly insolvent municipalities that have no prospect whatsoever, without outside intervention or assistance, of paying their outstanding debt to Eskom. The result is a Catch-22 situation for the applicants and consumers in the municipalities and Eskom has become the proverbial cholesterol in the municipal service delivery breakdown in Ngwathe and Lekwa. They simply have no other recourse than to approach the court,” Millar said.
He rejected Eskom’s argument that it merely acted according to its contracts with the municipalities and had no obligation towards the residents, because they are not party to the contracts.
Millar said Eskom was ignoring previous court rulings that made it clear that Eskom as an organ of state must follow a fair process when its decision will impose on the rights of residents. It did not do so in these two cases.
There is also an obligation on Eskom to try to resolve its disputes with the municipalities before taking action that brings about huge human suffering.
Some of the options open to Eskom included arbitration, which the contracts provide for, or appealing to energy regulator Nersa to intervene.
Millar ordered that the electricity supply to the two municipalities be restored until a court rules on a review of Eskom’s decision. The applicants must bring these applications before October 30.
In the case of Lekwa the supply can be restored right away, while in Ngwathe Eskom must do some repairs to the infrastructure that will cost little more than R100 000, an amount dwarfed by the ongoing suffering caused by the power problems.