The cutting of electricity

By Anton Katz

What happens when local government becomes dysfunctional?

Municipal services, such as electricity supply, water, sewage and garbage matters aren’t properly managed. How can local residents be protected from catastrophe?

This important issue has recently arisen in the Courts in relation to electricity supply. Eskom is tasked with the generation and supply of electricity. It does not supply electricity to individual users. Electricity is supplied by Eskom to municipalities throughout South Africa, and the municipalities in turn supply individuals and businesses within their territory. This scheme is long-standing and is historically a hold-over from the infrastructure set up by the apartheid government.

So, consider the following facts. An individual user (a business, factory or single family) uses and pays the municipality for all electricity used. But the municipality fails or neglects to pay Eskom for months and sometimes for years. The unpaid amounts escalate and eventually the municipality owes Eskom many millions or billions of rands. The debt is so large that the delinquent municipality cannot even keep up with paying the interest on the massive debt it owes to Eskom.

Eskom, a state-owned enterprise sues the defaulting municipality for the unpaid debt, obtains a judgment and unsuccessfully attempts to recover the monies owed. It enters into agreements with the municipalities to the effect that the municipalities will pay for future electricity supply, and slowly pay off the debt.

But Eskom’s tactic of adopting ‘a carrot and stick approach’ to extract payment from the defaulting municipalities failed to yield the desired outcome. It then decided to interrupt the bulk electricity supply at scheduled times: from 06h00 to 08h00 and again from 17h00 to 19h30 during the week; and from 08h30 to 11h00 and again from 15h00 to 17h30 on weekends. These times were to be extended, incrementally, until the point of a total termination of electricity supply, unless the municipalities made substantial payments to Eskom to reduce their indebtedness.

A number of businesses, through their Chambers of Commerce, and individuals challenged Eskom’s interruption decision in court. The Chambers put up solid evidence that the electricity interruptions would have a devastating effect as they ‘threaten the very fabric of society’, with hospitals, schools, households and businesses severely disrupted. The Chambers elaborated on the effects of electricity interruptions: Firstly, when the power supply is cut, all sewage works immediately come to a standstill. This means that sewage is not pumped to the sewage processing plants but instead, will simply sit (and will eventually spill into the streets) for the duration of the cut-off, with the associated, serious risks to the health of the community.

Secondly, the minute the power is shut off, the water purification and processing plants as well as those pumping water to the community to ensure adequate water pressure come to an immediate standstill. This means that taps run dry, households run out of water, and critical water-based facilities will cease functioning. Even worse, when the supply is reconnected, it will take some time for an adequate reserve to be generated to enable the community and business to recommence.

Thirdly, any process (industrial, commercial or domestic) that is dependent on electricity will immediately cease.’ And ‘the proposed interruptions will lead to the rapid collapse of the entire Emalahleni water network within 48 hours, and it is likely that a human and environmental disaster will follow; interruptions to the electrical supply to the water purification system will lead to raw, unpurified water flowing into reservoirs and creating a serious health risk to the community; there is a real risk that Eskom’s planned interruptions will lead to a total collapse of the entire sewer system; interruptions to the electrical supply to the sewage works will result in a situation where raw sewage flows into the natural waterways and ultimately finds its way into the Olifants River catchment system, creating an environmental hazard way beyond the boundaries of Emalahleni.”

In Court, Eskom defended its intended interruption. It argued that it had no relationship with the private users. Its only commitment and obligations were with and to the municipalities. If the municipalities did not pay, then it (Eskom) was entitled to cut. Therefore, the private users had no standing to challenge their decisions. It was only the municipalities who could sue them in Court. And the rationale for the cuts was based on a legitimate basis.

First, the interruption in supply avoided or limited further delivery without payment and secondly, was used as a tool or mechanism to “encourage” the municipality to start paying. Eskom testified that its objective in resorting to the drastic measure of interrupting the bulk supply of electricity to the municipalities was to contain the spiralling of the electricity debt which, over the years, had increased exponentially.

Eskom also contended that failure to take the drastic measures it had adopted would ultimately impact negatively on its overall capacity to generate electricity. And that if it were pushed to a point where it could no longer generate electricity, so its argument continued, the whole country would be plunged into darkness, with disastrous consequences on many fronts.

The Supreme Court of Appeal rejected Eskom’s defences for three separate reasons.

Firstly, the interruption of supply decision was irrational and therefore unconstitutional. The Court accepted the Chambers’ argument that to try to extract payment from a municipality that cannot pay is counterproductive. Indeed, it make things worse. Electricity cuts would make it harder for the municipalities to generate income to pass on to Eskom.

Secondly, the municipalities had constitutional obligations to its residents to supply basic services. Eskom could not undermine the municipalities’ constitutional obligations to provide basic services by cutting. And the Court referred to the notion that: “the provision of basic municipal services is a cardinal function, if not the most important function, of every municipal government. The central mandate of local government is to develop a service delivery capacity in order to meet the basic needs of all inhabitants of South Africa, irrespective of whether or not they have a contractual relationship with the relevant public service provider. The provision of electricity is one of those services that local government is required to provide.”

And thirdly, and in any event, before cutting, Eskom had to at the very least attempt to obtain assistance in the recovery of payment from the provincial and national spheres of government. It needed to exhaust every possible avenue available before taking the drastic step of interruptions. The Court ruled that Eskom’s decision to interrupt was unconstitutional and invalid.

The lesson to be learnt is that although the Courts cannot run and administer governmental functions, they can in appropriate circumstances hold government to account and protect the rights of affected individuals.

Anton Katz is a practising Senior Counsel, former United Nations special rapporteur on mercenaries and human rights, former Acting High Court Judge, and an admitted attorney in New York. He was born and raised in Sea Point.

• Published in the PDF edition of the June 2021 issue – Download here.

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