City Power CEO Tshifularo Mashava has indicated that the company is currently selling electricity to its customers at a rate lower than the price at which it purchased it from Eskom. As a result, City Power is now seeking a new supplier to restore profitability. The Auditor-General (AG) revealed that City Power's liabilities exceed its assets by over R1 billion, making it impossible to survive.

NOT MAKING PROFIT

Mashava explained that during winter, City Power buys electricity from Eskom at R6 per kilowatt hour and sells it for half of that. "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.'

BLAMING LOADSHEDDING

Mashava attributed the financial challenges to loadshedding, which has led to an overspend of R5 billion due to irregular expenditures by the power utility. "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 loadshedding, and the assumption was we wouldn't need that much money." She added:" 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."