With arrear debt owing to Eskom by municipalities having breached R110-billion, the State-owned company has announced that credit control processes could be initiated against 14 municipalities that may result in electricity supply being disrupted to customers in those areas.

In a statement, Eskom announced that it had begun the process of issuing notices in terms of the Promotion of Administrative Justice Act (PAJA) to provide an opportunity for affected parties to make representations before further action was taken. 

Eskom also invited written submissions on alternative solutions, and said it would communicate the way forward once it had considered all representations made through the PAJA process.

While not immediately naming the municipalities, it said they had been selected because they had either not settled their accounts for at least 18 months, had not met the conditions of the National Treasury municipal debt relief programme, or posed a significant financial risk to Eskom.

The 14 municipalities are believed to be among the 71 municipalities that have signed up to the National Treasury’s debt-relief programme, but which are not meeting the conditions.

“We have to address rising arrear debt to protect the operational stability we have restored and the financial discipline we have rebuilt in the first three years of our turnaround to deliver on our developmental mandate,” acting group executive for distribution Agnes Mlambo said.

She warned, too, that escalating municipal debt had wider implications for South Africa’s electricity reform agenda, and was already delaying the legal and operational unbundling of Eskom’s Distribution business.

“Should the municipalities fail to take corrective action, Eskom will proceed with credit control measures, which may include interrupting electricity supply at predetermined times, as permitted by law.

“If defaults persist, Eskom will be compelled to limit supply to levels commensurate with payments received,” Eskom said in a statement.

The move follows confirmation during the 2026 Budget that the National Treasury would support Eskom in its pursuit of Distribution Agency Agreements (DAAs) with municipalities that owe the utility money, including those that have signed up to the municipal debt relief programme, but which are in default.

Through DAAs Eskom is empowered to take over electricity distribution on behalf of defaulting municipalities to ensure revenue is collected and current accounts are paid to it.

The National Treasury confirmed last month that it had written to 15 municipalities instructing them to enter into DAAs with Eskom or face being excluded from the debt-relief scheme, whereafter they would become vulnerable to Eskom’s direct credit control mechanisms.