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Residents of Joburg’s suburbs face power cuts after City imposes increased deposits

Residents of Joburg’s suburbs face power cuts after City imposes increased deposits
Michelle Banda
By Michelle Banda
8 Aug 2024
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City Power has been targeting affluent northern Johannesburg suburbs, demanding customers clear their accounts and cutting off residents’ power after it imposed increased service deposits. Many customers claim they weren’t informed of the increases.

On 22 July 2024, City Power undertook a disconnection exercise in Johannesburg’s Northern suburbs, including but not limited to Melrose, Atholl, River Club Ext 9 and North Riding. Some customers have had their power reconnected while others remain without electricity.   

Residents told Daily Maverick that the disconnection took place without any prior notice or engagement before their bills were due on 24 July. Many of them also claimed to have not received the invoices until the point of disconnection, while some said they did not know their accounts were in arrears, or that they were in arrears due to the introduction of service deposits.

The addition of service deposits has caused particular consternation. Account holders who were disconnected said they were added days after their June accounts were issued. In July, they were shocked when City Power began disconnecting services, urging them to clear large sums of arrears.

In response to enquiries about electricity disconnections, the Member of the Mayoral Council for Finance in the City of Johannesburg, Dada Morero, explained the City’s policy on security deposits. He likened it to a landlord requiring a deposit to cover potential damages, stating that the City was entitled to request deposits to secure payment in case of customer default. 

He said: “This deposit is calculated and raised when a customer applies for a new service account and is included in the first invoice. The deposit is held by the City until the account is terminated, and refunded if no debts remain. Every application for services, including electricity, water, and sanitation, must be accompanied by a deposit to ensure customers honour their financial obligations,” said Morero, who is tipped to replace Kabelo Gwamanda as Johannesburg mayor.

Rude awakening


James Campbell, a resident of Atholl, said his power was recently disconnected.

“When I lost my power, I initially thought it was a transformer issue as usual until I realised that all the wires connecting electricity to my house had been cut off. Again I thought it had been vandalised until I noticed a note that was left for me by City Power saying power was cut off with a (message asking me to) please pay.”

He went to City Power’s offices in Sandown and was told that he was meant to pay R22,000 by 24 July. He normally pays about R9,000 a month for rates and electricity.

“When I asked why it was R22,000, she said when the power is cut-off ,we have to start from zero and that they have increased the deposits, which was R600 from my property, to R7,000.

“I  thought, well, yes, maybe (the deposit increase) is reasonable given that electricity has gone up over the 30 years I have had the house. I then asked why the amount was still at about R15,000 after paying the deposit and what was the other R6,000 for? I was told to pay for everything to be up to date. So I paid the R22,000 to be told reconnection would happen in 72 hours.” 

Campbell says he believes that this was a deliberate act by the City to force people to pay the higher deposits.

Similarly, Leonie and Bryan Selvan, who live in Elton Hill, faced disconnection even after proving they were not in arrears. They enquired why they were cut off despite having paid their bill, and were told “there was a lag in the delivery of the cut-off notices delivered by hand and email”. 

Bryan said that he showed the guy who was there the proof of payment, so he shouldn’t have disconnected them.

“It seems like it’s a money-making scam because these guys get paid for every person they cut off, and get paid to reconnect,” said Leonie.

Bryan said that his sister was in the same situation. She had been informed by the City’s revenue department that they were revising deposits to match two months worth of consumption. 

Bryan said his deposit, which was initially R3,679, had an additional R9,000 added in July. Reviewing past statements, he noticed his deposit had been manipulated: reduced from R5,614 to R3,679 in June, and then increased to R9,000 in July.

Despite a R15,000 payment in June, his July statement did not reflect this, showing an outstanding balance of R37,000.  He said the R9,000 added as arrears matched the new deposit amount, raising concerns about account accuracy and clarity.

John Aaron, from River Club Ext 9, said his power had also been cut off. He received a notice saying he owed R3,275.36, the equivalent of the new deposit. Aaron, however, said for him this was not the first incident.

‘Very concerned’


To date, DA councillor in Johannesburg, Belinda Kayser-Echeozonjoku, said they had received about 76 responses from people in wards 73, 74, 91, 103, 106 who had been disconnected. In some instances, they were fully paid up, on pensioners’ rebates, and some had acknowledgements of debt.

Echeozonjoku said the list had been sent to City of Johannesburg chief financial officer Tebogo Moraka.

“While the DA welcomes the City revenue collection drive, we are very concerned and disappointed regarding the disconnections where people paid in full. In some instances, the due date hadn't arrived yet and residents were cut off, and where mistakes happened, the city is taking too long to rectify and reconnect,” said Echeozonjoku.

“In some cases, people paid but due to the deposits required are now falling in arrears, and are not given the option to pay the deposits off over time. The DA had proposed this to the City regarding the deposits to assist residents. Not many residents have R20,000+ available to pay at once.

“The City had also not sent explicit communication regarding the implementation and dates the deposits will be implemented for residents to prepare and possibly make arrangements for this.”

No water for two months 


Power is not the only service that seems to have been cut off.

Leon Kohrs told Daily Maverick that they had been cut off from Joburg Water for two months now. He said it all started with the delivery of a statement to their Birdhaven house, which was incorrectly addressed, and then shortly after the water was cut off.

He said officials didn’t explain why they cut off the water, but promised to reconnect the house within 72 hours. Kohrs said he had been surviving from water from their borehole while trying to rectify the issue.

“My many calls were ignored. In one instance the operator answered the call but took off his or her headset, placed it on the table, and continued their conversation in the office. I also tried to log calls via the SMS number, but this was ignored, and I never got a reference number. 

“Then on Saturday, my borehole had an issue. This time I managed to log a call over the phone. The technician arrived 48 hours later instead of the indicated 24 hours, and we were the only house in the area without water.

“He then told me we were cut off.  So I had to call back, but this time to the accounts department. The indication is that it should happen within 72 hours. We were still waiting today.”

Joburg defends disconnections


Morero did not respond to questions regarding residents’ complaints that their services had been disconnected without proper notification. Instead, he outlined the City’s revenue collection system and the application of deposits.

“The City is legally required to collect revenue from residents, businesses, and organisations for essential municipal services like water, electricity, sewer services, refuse collection, and property rates. The Credit Management sub-directorate under the Revenue Shared Service Centres oversees maximising revenue collection, reducing debtor growth, and improving customer experience.

He said customers were required to pay deposits equivalent to two months’ service costs.

“The policy, approved in August 2022, mandates that customers deposit an amount equivalent to two months’ average consumption upon registration. This deposit is periodically reviewed to ensure it remains sufficient. If a customer’s account becomes overdue, the City can offset the deposit against the debt and may disconnect services if the deposit is unpaid,” said Morero.

He added that certain customers, such as pensioners, those under the Extended Social Package (ESP), and properties with a market value not exceeding R500,000, are exempt from the deposit review and payment.

“Payments are allocated to the oldest debt first, followed by administrative costs, sundries, interest, and current charges. This ensures payments cover the total due amount, preventing accounts from being in arrears. The City communicated with all affected parties about the deposit inadequacy after a review and has disconnected services for those who did not respond to the adjusted deposit request.” 

In June 2024, the Johannesburg Division of the High Court ordered the City of Johannesburg and City Power to pay Eskom R1.073-billion, including interest for their unpaid electricity account, which has defaulted since October 2023.

In May 2023, reports surfaced saying City Power was allegedly broke. The City has slammed the allegation, stating they it was without any factual basis. DM

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