Mbombela manufacturer wins urgent interdict against load shedding

A manufacturer of wooden panels for the construction industry earlier this month obtained a high court order to stop Eskom and the Mbombela municipality from subjecting its plant near White River in Mpumalanga to load shedding.

It relied on an earlier agreement with the municipality to keep the lights on as long as the factory reduces its electricity usage to at least 70% of normal use.

Judge Henk Roelofse ordered the municipality and Eskom to stick to the terms.

This is despite Eskom’s legal right to intervene in the implementation of load shedding if the municipality fails to reduce its load sufficiently and its argument that failing to implement load shedding will put the national grid at risk. 

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The municipality must be able to make another plan to comply with the load shedding rules rather than ignore its agreement with the owners of the Sonae Arauco (SA) factory, Roelofse said.  

The plant, situated at Rocky Drift between Mbombela and White River, is the municipality’s single biggest client, with an annual electricity bill of more than R100 million.

It employs 250 people and spends more than R600 million annually in the local economy. 

It manufactures in a continuous process 24/7, and a constant power supply is therefore critical. The equipment operates at high temperatures and is extremely sensitive to interruptions in the power supply. Load shedding especially results in huge damage and poses a high fire danger for staff, contractors, suppliers and the public. 

No alternatives

Sonae told the court it has no alternative energy source. To provide an alternative would cost about R600 million and take 12 to 18 months to complete. It is not currently able to do that.

Early in 2020, Sonae approached the municipality and a load curtailment agreement was reached. The municipality would not cut the supply to the factory during load shedding, and the factory would decrease its power usage to at least 70% of the normal load. 

This enabled Sonae to keep production going, although at a decreased level, limit damage to equipment, and remain commercially viable while maintaining safety standards. 

The agreement was implemented, and all went well until December 2022, when the municipality, without warning, started subjecting the factory to load shedding. Sonae could not find out what the reason was.

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After the factory engaged the council, the municipality “came to its senses” in January and gave an undertaking that it would comply with the agreement, as before.

The company specifically asked to be notified in advance should the municipality anticipate any problems because of the fire risk when the power supply is interrupted unexpectedly, which could endanger lives.

On 9 June, load shedding once again hit without warning, and management approached the court for urgent relief. 

Lawful duties

The municipality argued that it merely implements load shedding when called upon by Eskom. Load shedding is a lawful measure to protect the national grid, and Sonae cannot get a court order to prevent the municipality and Eskom from executing their legal duties. 

It further argued that only the municipal manager is authorised to enter into agreements on behalf of the municipality, and municipalities cannot lawfully enter into agreements unless it is in writing. 

Eskom argued that it must intervene where municipalities fail to reduce their load sufficiently during load shedding, and the agreement between Sonae and the council is irrelevant and unlawful for failing to provide for Eskom to take over the implementation of load shedding if necessary. 

Eskom also argued that load shedding was not implemented at the factory due to an error.

The court found that it was not the legislation around load shedding that was in dispute but how it was implemented.

Eskom is within its rights to implement load shedding when the municipality fails to comply with the applicable rules, which is precisely what it did.

Valid and compliant

On the other hand, the court found the agreement between Sonae and Mbombela valid and compliant with the law. The company had a legitimate expectation that its power supply would not be interrupted due to load shedding. 

The court was not precisely clear on what Eskom’s argument was.

It nevertheless found that if Eskom cut the supply because the municipality failed to reduce its load enough, there must be other ways to achieve the same goal. The municipality was able to do it for a considerable period, the court found. 

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Morné Mostert, head of local government at AfriForum, said municipalities often complain that load shedding has a huge impact on their electricity sales and the municipal association Salga supports this complaint. They should, however, find better ways to manage their distribution networks for the benefit of residents and especially businesses. 

He says municipalities that fail to consider better practices will increasingly be challenged in court for acting irrationally. 

Mostert further points out that the court did not accept Eskom’s warning of total grid collapse. “There is an expectation that government at different levels will exercise its obligations more efficiently,” he said. 

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