Eskom has taken the first steps towards cutting electricity supply to the top 20 defaulting municipalities that collectively owe it R3,7bn for bulk electricity supply.

The utility has announced its plans to cut supply to these municipalities from 6am to 10am and again at 5pm to 9pm every weekday; and 7am to 10am and 5pm to 8pm over weekends, starting in the middle of winter, on 5 June.

It started the formal process of informing all parties likely to be materially affected by the interruptions.

This follows national treasury’s recent announcement that it is withholding money from 60 municipalities that persistently fail to pay Eskom and its other creditors on time. Treasury also stated its support for municipalities to disconnect electricity supply to government departments that are in arrears.

Eskom said at the end of March total municipal arrear debt amounted to R4,6bn.

Eskom is increasingly struggling financially and is currently pulling all the levers in an effort to improve its liquidity and balance sheet. Government has indicated that it will not contribute beyond the R23bn cash injection scheduled to be paid to Eskom during the current financial year.

Energy regulator Nersa has received an application for a retrospective adjustment of electricity tariffs for 2013/2014 and Eskom is expected to submit its proposal for a selective re-opener of the tariff determination for the three years from 1 April 2015 to 31 March 2018 soon. In a submission to local government association Salga, Eskom said it will apply for a total tariff increase of 25,3% for 2015/2016.

Eskom has in the past threatened to disconnect defaulting municipalities, but political intervention in most cases prevented this from happening, without solving the non-payment issue. It remains to be seen whether government’s new appreciation of the severity of Eskom’s predicament will result in support of the utility acting decisively.

Eskom in a statement recognised that “the disconnection of electricity supply may cause undue hardship to consumers and members of the community, and may adversely affect the delivery of other services. However,” it said, “customer disconnection is always the last resort explored.”

Eskom said a list of defaulting municipalities will be published per province by 30 April 2015 in local provincial media channels.

“Consumers within the jurisdiction of a defaulting municipality will be given adequate notice in terms of the Promotion of Administrative Justice Act and will be given the opportunity to make written representations to Eskom.”

The list of the top 20 defaulting municipalities are: