Johannesburg residents could face an especially cold winter after Eskom issued a notice to the metro and City Power of its intention to reduce, interrupt or terminate the supply of electricity to certain bulk supply points because of an outstanding debt of R5.3bn.The amount excludes the current account of R1.6bn by the City of Johannesburg and City Power.The debt is part of the more than R111bn owed by municipalities to Eskom, which has launched several initiatives to assist them with repayment.In a statement on Tuesday night, Eskom said it has issued the notice to City of Joburg and City Power after its attempts to reach an agreement for the repayment of the debt had not been honoured.If Eskom follows up on its threat, Joburg residents could be in for a harsh winter as demand generally spikes in winter. Eskom’s notice comes after finance minister Enoch Godongwana wrote a stinging letter to Johannesburg mayor Dada Morero slamming his agreeing to a wage agreement of R10.3bn when the city lacked the funds, and threatened to withhold the metro’s R8bn equitable share instalment for July if Morero doesn’t scrap the deal.The city is technically insolvent, having incurred overexpenditure of about R3.9bn on employee-related costs, bulk electricity purchases, inventory consumed and operational costs.The council’s finances are further severely constricted due to poor revenue collection and the resultant failure to meet service delivery targets. In April, GCR Ratings revised the city’s ratings outlook from stable to “rating watch negative” because of the metro’s delays in finalising its annual financial statements.End of the lineIn its statement on Tuesday, Eskom said it has been working with the metro and City Power for more than two years to support them in meeting payment obligations.“As a result of [the] continued failure to honour its electricity supply agreement with Eskom, including repeated defaults, Eskom has been forced to issue a notice of its intention to reduce, interrupt and/or terminate the supply of electricity to certain bulk supply points against the City of Johannesburg and City Power,” the statement reads.“Eskom maintains it simply cannot be acceptable to the city’s residents and all South Africans that City of Joburg/City Power is collecting electricity revenue but failing to pay over Eskom’s share. “While Eskom continues to focus on being cost-efficient, escalating municipal and metro arrear debt undermines these efforts.”Eskom added that its financial sustainability and ability to supply electricity at affordable prices depend on its ability to improve its balance sheet by increasing revenue and reducing expenses. “Revenue can only be increased by collecting electricity debts and/or increasing electricity tariffs,” it said in its statement, adding that many municipalities and metros are working with Eskom on debt solutions, and Eskom is continuing to accelerate its support for this approach.Eskom announced earlier this month that nine municipalities had received council resolutions to sign distribution agency agreements after consultation processes. It said that it had provided a solution to support municipalities and metros to sustainably deliver electricity.A distribution agency agreement is a long-term, but not permanent, contract between Eskom and a municipality or metro that offers a suite of services and solutions aimed at restoring the sustainability of electricity provision by enhancing a metro’s and municipality’s technical and financial sustainability.The services include skills development and training, replacement or installation of smart meters, as well as Eskom collecting revenue on behalf of the municipality. Eskom is working nationwide to assist in the rollout of the initiative.