City Power looking at buying electricity outside of Eskom

JOHANNESBURG - Johannesburg City Power is looking at purchasing electricity outside of Eskom in a bid to become profitable again.  

The Auditor-General (AG) has raised doubt over whether the power utility can stay afloat after its total liabilities exceeded its total assets by over a billion rand.  

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The power utility’s CEO, Tshifularo Mashava, said the entity is selling electricity to customers at a lower rate than it purchases it from Eskom.  

She said that in winter, City Power buys electricity from Eskom at R6 per kilowatt hour and sells it for R3 per kilowatt hour.  

“That’s why we went on an independent power producer programme so that we can buy somewhere else where it’s not R6 per kilowatt hour, where it’s way cheaper and we are able to break even or make a surplus, or we put in what we call battery energy storage systems so that we can bank the cheap power when you are asleep and we can dispatch it in the morning during that peak period, and that will assist us in dealing with our profit margins.”  

Mashava has attributed City Power’s irregular expenditure of about R5 billion to load shedding.  

She said that during the 2023/2024 financial year, the power utility was forced to go over budget due to the winding down of load shedding.  

“We are given a budget, and they will say you will buy for R40 billion. The city [of Johannesburg] gives us a budget and they had actually cut that budget because we were in the year of load shedding and the assumption was we won’t need that much money. 

"But what happened? The Eskom bill did not go down and at some point, load shedding also ended. So, we exceeded our budget by over R3 billion and the AG calls that irregular expenditure because you should have budgeted to the T.”