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# Fourteen towns had until today to hand Eskom control of their electricity meters
- URL: https://www.businessbagel.com/eskom-distribution-agency-agreement-deadline-fourteen-municipalities/
- Published: 2026-09-01T03:45:00.000Z
- Updated: 2026-09-01T03:44:59.000Z
- Description: None of them has signed. The agreement on the table moves the billing relationship, and the money that comes with it, out of the municipality and into Eskom's account.
- Author: Christian Maidman
- Tags: Policy, Business Bagel News, #pick

Paying your electricity bill in most South African towns means paying the municipality, which buys the power from Eskom in bulk and is meant to pass the money on. Fourteen municipalities have not been passing it on. They had until 1 September to hand that job to Eskom or risk having their supply cut, and National Treasury says none has signed.

A Distribution Agency Agreement is narrow and drastic. Eskom takes over distribution in the town, temporarily and for a fee: it runs the meters, sends the bills, and households pay Eskom directly. Eskom keeps what it is owed for the bulk power and the cost of serving those customers, and the balance goes back to the municipality. The town keeps the electricity. It loses the till.

Eskom is not pushing from weakness. It reported a second straight profitable year on Monday, R30.3 billion after tax, with four days of load shedding all year. What it is short of is paying customers: it sold 6.2% less electricity than the year before, industrial demand fell by almost a quarter, and it now expects two to three gigawatts of capacity nobody is buying.

## The debt that keeps outrunning the fix

Municipal arrears reached about R119 billion by June, almost a fifth up over the financial year, and Eskom's projection, if nothing changes, is R358 billion by 2031\. It also left R15.8 billion out of its revenue this year, about a twentieth of the total, as money it does not expect to collect.

There was a fix, and it has not worked. Three years ago the government offered to write off a third of a town's historical debt each year, on condition it paid its current account for twelve months straight. Municipal debt has more than doubled since then, and only R4.2 billion has actually been written off. Eskom's alternative has been to reach the money first, withholding with Treasury the grant allocations defaulting towns run on. That got R5.2 billion out of the City of Johannesburg.

## The contract nobody wrote

The towns are not simply digging in out of pride. Treasury itself called Eskom's original standard agreement heavily skewed in Eskom's favour, and a working group of Eskom, Treasury, the municipal association Salga and two national departments was set up to write a fairer one. It never did. Eskom concluded a new agreement with Ditsobotla anyway, four are already running, and AfriForum is in court to have the Merafong one set aside because the legally required steps were skipped.

Salga has asked Treasury for another six months. One of the fourteen, Dr Beyers Naudé, has a court order holding off the cut-off while it follows the proper process.

The people on the other end of this are not the councillors. In Masilonyana, one of the fourteen, an administrator is running the town, the municipal manager and finance chief are suspended and fighting it in court, the workers have been on strike since mid-June, and the taps are dry.