Cape Town electricity supply battle with Eskom over control of suburbs
With higher tariffs, endless outages, and frustrated residents, Cape Town wants control of Eskom‑supplied suburbs.
By Larry Claasen
THE City of Cape Town is not giving up on taking control of the distribution of electricity away from power utility Eskom that is currently supplying some of its suburbs.
Eskom directly supplies about 1,25 million of Cape Town’s residents, something the city wants to change as it says it can provide better services, reduce infrastructure safety risks and also provide “equitable cost” to the customers.
When the city speaks of equitable cost, it is talking about the high electricity tariff rate Eskom is charging the residents it supplies compared to the rate charged by the City of Cape Town.
Households using less than 450 kWh per month at a rate of R3,43.61 c/kWh would be charged R1 546,24 (VAT inclusive) under Eskom’s Homelight 60A tariff. By comparison, City of Cape Town residents only pay R 1 172,29 at a rate of R2,60.51 c/kWh for the city’s LIFELINE tariff.
Aside from the difference in electricity rates, the level of service on the part of Eskom in the areas it supplies has also been an issue. Delft residents, for example, drew up a petition in 2024 calling for electricity supply to be handed over to the City of Cape Town because of unscheduled outages for long periods, slow response times and poor communication by Eskom.
Property developers in the region are also not happy as they have to go through the state owned company’s inefficient bureaucracy to arrange for connections to their developments, resulting in expensive delays.
The City of Cape Town and Eskom were in negotiations to transfer supply but in May 2024, Eskom ended the talks. In a letter to City of Cape Town Mayor Geordin Hill-Lewis, Eskom GM Mbulelo Yedwa said the move was not supported by Eskom’s executive team.
“The proposed request regarding the transfer of specific Eskom supply areas to the City of Cape Town was discussed and unfortunately, it was not supported. It was concluded that it is in Eskom’s best interest not to transfer or sell any assets due to the operational requirements of the Eskom business.”
At the time, Hill-Lewis said bringing the Eskom‑supplied areas under city control formed 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.
Though the city supplies 75% of residents with electricity, a quirk in the merging of several city councils into the City of Cape Town Metro when Apartheid ended in the 1990s saw Eskom continue to supply some areas directly. At the time, the licensed electricity distribution areas existed before the unicity amalgamation, meaning that the city inherited supply areas from the former local councils, while Eskom kept control of its own licensed areas.
All this means is that the Eskom distribution license defines the Eskom supply area within the City of Cape Town metro boundaries and the city’s distribution license defines the city’s supply area. Each licensee has exclusive authority to supply electricity and operate electricity networks in their supply area.
The city is prohibited by law from supplying, operating or responding to electricity faults in the Eskom supply area. Aside from getting Eskom to agree to pass on control to the city, the issue can be resolved with power regulator Nersa being asked to mediate or settle disputes arising under the Electricity Regulation Act.
Eskom has yet to respond to CBN’s questions on the matter.
For its part, Alderman Xanthea Limberg, Mayco Member for Energy, said the city was not giving up on the Eskom‑controlled areas.
“The city remains in ongoing engagement with Eskom on a range of electricity-related matters, including the potential transfer of supply areas that currently fall under Eskom’s licensing mandate, where it is feasible and in the public interest.”
Transferring these areas, however, would mean Eskom would be starting sensitive negotiations on a matter that would affect its revenue just as it is being split into three separate companies. The split will see its generation, transmission and distribution operations become stand‑alone state owned companies, which will be responsible for generating their own revenue.
Eskom has about 7 million residential customers, and generated R22,16 billion in revenue from them for the year to end March 2025.
Despite not being able to get control over these areas, the city and Eskom still work closely together when it comes to delivering services.
“The city already provides certain services within Eskom‑supplied areas, such as maintaining public lighting infrastructure across its network of 245 000 streetlights across the metro,” said Limberg.
She added: “The city continues to collaborate with Eskom to enhance service delivery, address operational challenges and support infrastructure expansion, with the shared objective of ensuring reliable electricity supply for all so that Cape Town’s residents are well served.”
