City Power considers legal action against Eskom over loadshedding

31 October 2021

City Power would like to confirm the media reports that we wrote to Eskom to reject their assertion to refuse to exclude our customers in Johannesburg from loadshedding Stage 1 and 2.

The letter sent on Friday, comes at the back of many engagements both City Power and Eskom had this past week in which we sought to present our case why we want the City to be excluded from loadshedding, especially after we signed a new power purchase agreement with Kelvin Power Station which gives us an added capacity of 220MW.

In the meetings Eskom refused to move on its stance that the 180 MW electricity power generated by Kelvin’s Power Station has already been included in City Power’s baseload and thus cannot be taken into account in deciding to exclude City Power from loadshedding. They also express their willingness to consider excluding City Power from loadshedding in the event that City Power produces electricity in excess of the 180MW currently produced through Kelvin.

Eskom also pointed out that Kelvin will be required to ramp up higher outputs at short notice as and when Eskom anticipates loadshedding, if the City of Johannesburg is to be excluded.

City Power rejects the contemptuous reasoning by Eskom in this matter.

Notwithstanding our reservations about Eskom’s inclusion of Kelvin Power's 180 MW on our baseload, we note Eskom preparedness to consider excluding City Power from loadshedding in the event that Kelvin Power is able to supply power in excess of 180MW.

City Power repeated our assertion in our initial letter to request exclusion, and in the subsequent meetings that Kelvin Power’s electricity supply has averaged at least 230MW for the past three months prior to us signing the agreement.

In substantiation of Kelvin Power's ability to produce 230MW, we have already provided Eskom with our technical data to demonstrate the said performance, which Eskom seems to ignore.

Infact Kelvin Power station has since 2018 consistently produced power averaging 200 MW and that evidence was presented to Eskom.

It is City Power's view that we have done everything in our power to demonstrate our added capacity through Kelvin Power Station which qualifies City Power for some form of loadshedding exemption.

City Power’s request for exemption is not based on Kelvin’s ability to ramp up at short notice, but on Kelvin’s contribution to the overall National Grid power supply pool. So it is wrong of Eskom to bring this up as one of the conditions for exclusion.

City Power wishes to express its disappointment that Eskom does not seem to recognize City Power’s efforts and contribution to alleviate the constraints on the national grid. The production and supply of electricity through Kelvin Power Station is an initiative wholly and exclusively funded by City Power and the City of Johannesburg’s rate payers without any form of assistance from Eskom.

Eskom has other municipalities who do not have any electricity generation and supply initiatives, but are treated the same as City Power when it comes to loadshedding.

We believe that Eskom’s expectation and continued benefit of City Power’s contribution to the national grid without any form of loadshedding exemption or partial exemption amount to an unfair and unequal treatment of City of Johannesburg’s residents viewed against other municipalities who are not contributing any baseload generation capacity to the national grid.

As things stand City Power is one of Eskom’s biggest customers in the Gauteng Region having spent over R12 billion of our resident's money on electricity bulk purchases from Eskom in the last two financial years.

This financial spend lays further credence to our argument that City Power substantially contributes to the overall sustenance of Eskom as compared to other customers. We believe that such a huge financial contribution to the Eskom coffers should surely count for something when Eskom implements its Stages 1 and 2 loadshedding.

It is City Power’s contention that the inclusion of Kelvin Power's 180MW on our baseload without the concomitant compensation either in the form of financial contribution by Eskom or exemption, wholly or partially, cannot be justified under regulatory rules.

We doubt if it was the intention of the regulatory regime to enable Eskom to unilaterally include independently produced power from municipalities like City of Joburg, without the resultant benefit to such municipalities.

City Power reiterates its commitment to the alleviation of the electricity network constraints in the national interest. Our commitment however should not unduly disadvantage residents of the City of Johannesburg when Eskom can genuinely find alternative means to recognize the benefit that City Power brings.

We request Eskom to  reconsider its position on this matter failing which City Power will have no alternative but to consider other available legal remedies to protect  the interest of the City of Johannesburg residents.

Issued by Isaac Mangena, Spokesperson, City Power, 31 October 2021