Eskom has broken off discussions to transfer its power supply areas to the City of Cape Town, which would allow it to become independent of Eskom as a service provider.

According to the City of Cape Town, discussions were at an advanced stage with plans to appoint consultants to facilitate the take-over of Eskom supply areas in Cape Town.

City of Cape Town Mayor Geordin Hill-Lewis received a letter from Eskom General Manager Mbulelo Yedwa calling off discussions. The letter, on the city’s website, states: “It is in Eskom’s best interest not to transfer or sell any assets due to the operational requirements of the Eskom business.”

Eskom responded to Energize with a statement saying it had received requests from several municipalities to take over areas currently supplied by the power utility. “Given these requests and issues, Eskom believes a coordinated approach is necessary to address them rather than a haphazard one. This is especially pertinent as Eskom is undergoing a legal separation into three entities: Generation, Distribution and Transmission.”

A standardised approach would be in the best interest of all stakeholders involved, Eskom said. “The separation was a strategic objective and a key aspect of Eskom’s turnaround plan as envisioned in the Department of Public Enterprises’ roadmap for Eskom in a reformed electricity supply industry.”

Approximately two-thirds of Cape Town’s electricity customers are served directly by the city. The remaining third are served by Eskom.

Speaking to residents at the Elsies River Civic Centre earlier this week, Hill-Lewis reaffirmed Cape Town’s commitment to expanding the city’s electricity supply network to include more areas. He also encouraged residents to sign a petition in support of the city’s takeover of the electricity service in Eskom supply areas.

Hill-Lewis said the city had made progress with the initiative under former Eskom CEO Andre de Ruyter and now only needed the go-ahead. “However, newly appointed Eskom executive CEO Dan Marokane has quite bluntly cancelled Eskom’s interest in transferring supply areas.”

The objective is to integrate all Cape Town residents into the city's supply network. With a planned R4 billion investment in the electricity grid over three years, Cape Town strives to reduce reliance on Eskom in favour of more cost-effective power sources and ensuring better services and infrastructure management, Hill-Lewis said. This forms part of Cape Town’s Energy Strategy, which charts the long-term path to 2050 as part of “a great transition from a centralised supply of unreliable, costly and fossil fuel-based Eskom energy to an increasingly decentralised supply of reliable, cost-effective, carbon-neutral energy from a diverse range of suppliers”.