OUTA calls for reforms as Eskom warns of possible Joburg power cuts

The Organisation Undoing Tax Abuse (OUTA) says customers who pay for electricity should not be punished for municipal financial failures, after Eskom warned warned that parts of Johannesburg could face a major power crisis.

The power utility has warned that parts of the city could be left in the dark, if the City of Johannesburg and City Power fail to settle a R5.2 billion debt by 8 July.

OUTA argues that the dispute between Eskom and the City of Johannesburg exposes deeper failures in municipal revenue management, rather than just a payment crisis.

The organisations Executive Manager, Julius Kleynhans, says Eskom should explore direct revenue collection mechanisms to ensure it receives its share of electricity payments before municipalities allocate funds elsewhere.

“If municipalities cannot manage the process responsibly, alternatives need to be explored that still protect the customer. This could include split-payment mechanisms where Eskom automatically receives its share of electricity revenue before the balance is allocated to the municipality.”

@Eskom_SA threat to interrupt or reduce electricity supply to parts of Johannesburg over unpaid municipal debt is a predictable consequence of @CityofJoburgZA years of financial mismanagement however paying residents and businesses cannot become collateral damage.

Read our full… pic.twitter.com/nGANMvUdCp

— OUTA (@OUTASA) May 20, 2026

Eskom has issued a formal notice of its intention to “reduce, interrupt or terminate” electricity supply to certain areas, accusing the city of repeatedly defaulting on payments despite more than two years of engagements aimed at resolving the dispute.

Eskom Acting Group Executive for Distribution, Agnes Mlambo, said the utility is concerned that the situation ultimately impacts ordinary residents.

“Unfortunately, this action comes across as punishing the customers or the residents of the city. But it is important that what is paid to the city, the city also passes it on.”

Eskom says the debt excludes an additional current account of more than R1.5 billion due in June, placing even more pressure on the city’s strained finances. 

The utility has warned that rising municipal debt threatens its financial sustainability and its ability to maintain stable electricity supply.

The warning comes amid growing scrutiny over Johannesburg’s finances followinga leaked National Treasury letter to Mayor, Dada Morero, reportedly flagging concerns over the city’s deteriorating financial position and calling for urgent intervention to prevent a deeper crisis.

Finance Minister, Enoch Godongwana, has also expressed concern over the City of Johannesburg’s inability to settle its creditor debt, which reportedly climbed to R25.2 billion during the 2024/25 financial year.

For many residents already affected by load reduction, unemployment and rising living costs, the latest stand-off has deepened fears over electricity reliability in South Africa’s economic hub.

Johannesburg is among several municipalities owing Eskom, with the total municipal debt currently standing at R111.6 billion. 

Eskom says it is working with some municipalities through its Distribution Agency Agreement programme, which includes support measures such as smart meter installations, revenue collection assistance and technical interventions aimed at stabilising electricity delivery.

#EskomMediaStatement

Eskom issues a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points against the City of Johannesburg and City Power as arrear debt reaches R5.2 billion pic.twitter.com/8LB8goJhfQ

— Eskom Hld SOC Ltd (@Eskom_SA) May 19, 2026

Meanwhile, Johannesburg Mayor Dada Morero says efforts are under way to resolve the dispute between the City of Johannesburg and Eskom.

Morero made the remarks on Wednesday at St Mary’s Anglican Church, where he delivered this year’s State of the City Address (Soca).

While he insisted the city is in a strong financial position, Morero urged residents not to be alarmed by Eskom’s threats to disconnect the metro from the grid over non-payment.

“This challenge is not only affecting the City of Johannesburg, but several municipalities across the country,” Morero pointed out.

He also dismissed claims that the city is broke and on the brink of collapse, maintaining that his administration remains in control of its finances.

2026 JOBURG SOCA: Joburg Targets Infrastructure Crisis with Eskom Deal and Service Delivery Reforms.

Infrastructure, energy and service delivery dominated the address. Morero acknowledged serious backlogs exceeding R220bn, high water losses, ageing infrastructure and… pic.twitter.com/FDlectfSFo

— City of Joburg (@CityofJoburgZA) May 20, 2026