Johannesburg: City Power and Eskom have reached an agreement over their long-standing electricity billing and debt dispute. The two parties have been in dispute regarding the amount owed to Eskom as debt and how the power utility bills City Power for bulk electricity supply.

According to South African Government News Agency, during a media briefing on Tuesday, the Minister of Electricity and Energy, Dr. Kgosientsho Ramokgopa, announced that City Power will pay an amount of R3.2 billion to Eskom over the next four years. In return, Eskom will write off some R830 million in penalties and related costs.

The Minister explained that challenges with regard to tariffs during winter have been acknowledged. The time-of-use tariff during winter is particularly heavy, making it difficult for households, industries, and customers to meet their obligations. Therefore, there will be relief during winter periods concerning the payment of the R3.2 billion. Eskom agreed to write off the R830 million, which includes the removal of interest on the debt, load shedding estimations, and penalties related to notifiable maximum demand.

Dr. Ramokgopa highlighted that the resolution between the two entities could serve as a model for other struggling municipalities. He expressed optimism about the development and mentioned ongoing discussions with other municipalities, such as Tshwane, to explore similar relief measures. He emphasized the importance of Eskom collecting revenue to reinvest in its asset base and electricity generation.