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ANNEXURE A

(Rev. 8 Apr.2009)
STANDARD CONDITIONS OF SUPPLY FOR
SMALL SUPPLIES WITH CONVENTIONAL METERING
1

INTERPRETATION AND DEFINITIONS


1.1

1.2

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Unless the context in this Agreement clearly indicates a contrary intention, expressions
which denote:
1.1.1

a gender shall include the other gender;

1.1.2

a natural person shall include a juristic person, and vice versa;

1.1.3

the singular shall include the plural, and vice versa; and

1.1.4

Parties shall mean the Parties to this Agreement as described in Clause 1 of the
Electricity Supply Agreement and Party shall be construed accordingly;

1.1.5

words and expressions defined in the Electricity Regulation Act, the Eskom
Distribution Licence, Eskoms Schedule of Standard Prices, NRS 048 and NRS
057 shall bear the same meaning when used in this Agreement as revised from
time to time or as replaced by a national standard.

1.1.6

the rule of construction that this Agreement shall be interpreted against the party
responsible for the drafting or preparation of this Agreement, shall not apply.

The words and expressions used in the Agreement and this Annexure A shall have the
meanings as assigned to them and cognate expressions shall have corresponding
meanings:
1.2.1

Active Energy Charge


means a charge linked to each kWh (unit of energy) consumed.

1.2.2

Affected Party
has the meaning referred to in subclause 25.1 of this Annexure A.

1.2.3

Agreement or this Agreement


means the Electricity Supply Agreement and Annexures A and B.

1.2.4

Connection Fee
means a standard minimum upfront fee payable by a customer towards the cost of
a new connection.

1.2.5

CUSTOMER
has the meaning given to it in Clause 1 of the Electricity Supply Agreement.

1.2.6

Electricity Regulation Act


means the Electricity Regulation Act (Act 4 of 2006), as amended or re-enacted
from time to time.

1.2.7

ESKOM HOLDINGS LIMITED


means Eskom Holdings Limited' (Reg No: 2002/015527/06) a Company
incorporated in terms of the Company Laws of the Republic of South Africa, with
its registered office at Megawatt Park, Maxwell Drive, Sandton (hereinafter
referred to as ESKOM).

1.2.8

Force Majeure Event


means any act, event or circumstance or any combination of acts, events or
circumstances which:
(a)

is beyond the reasonable control of either party (the Affected Party);

(b)

is without fault or negligence on the part of the Affected Party and is not
the direct or indirect result of a breach or failure by the Affected Party to
perform any of its obligations under this Agreement;

(c)

was not foreseeable or, if foreseeable, could not have been (including by
reasonable anticipation) avoided or over come by the Affected Party,
taking reasonable action;
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(d)

prevents, hinders or delays the Affected Party in its performance of all (or
part) of its obligations under this Agreement.

Without limiting the generality of the foregoing, a Force Majeure Event may include
any of the following acts, events or circumstances, but only to the extent that it
satisfies the requirements set out in paragraphs (a) (d) above:
(i)

war, hostilities, belligerence, blockade, acts or terrorism, sabotage, civil


commotion, riot, revolution or insurrection occurring in South Africa;

(ii)

any laws, decrees, regulations of Governmental authorities;

(iii)

strikes that are widespread, nation-wide or political in nature (but excluding


strikes, lockouts and other industrial disturbances of the Affected Partys
employees which are not part of a wider industrial dispute materially
affecting other employees within South Africa);

(iv)

Act of God, including, drought, fire, earthquake, volcanic eruption,


landslide, flood, storm, cyclone, tornado, typhoon or other natural
disasters;

(v)

epidemic or plague;

(vi)

ire, explosion or radioactive or chemical contamination;

(vii)

air crash, shipwreck or train crash; and

(viii)

any act, event or circumstance of a nature analogous to any of the


foregoing.

A Force Majeure Event does not include shortage of cash, any inability or failure to
pay money, any inability to raise finance or any changes in price and market
conditions.
1.2.9

Force Majeure Notice


has the meaning set forth in subclause 25.1 of this Annexure A.

1.2.10 Month
means the period between successive monthly meter readings, irrespective of
whether such readings are taken on the last day of the calendar month; provided
that if meter readings are made at three-monthly intervals, 'month' shall mean
one-third of the period between successive meter readings, and the monthly
consumption of electrical energy in kWh shall be deemed to be one-third of the
kWh supplied in the period.
1.2.11 Monthly Connection Charge (Existing supplies only)
means a monthly repayment of the required capital contribution where ESKOM
provides the CUSTOMER with financing.
1.2.12 NERSA
means the National Energy Regulator or its successor-in-title, established in terms
of the National Energy Regulation Act (No 40 of 2004).
1.2.13 Network Charge
means a fixed charge payable per Point of Delivery every Month, whether
electricity is consumed or not. The purpose of the Network Charge is to recover
part of the fixed network costs (including capital, operations, maintenance and
refurbishment) associated with the provision of network capacity required and
reserved by a customer.
1.2.14 Notified Maximum Demand
means the Maximum Demand notified in writing by a customer and accepted by
ESKOM, that the CUSTOMER requires ESKOM to be in a position to supply on
demand during all time periods. It is normally the capacity that ESKOM will reserve
for a customer for the short term, i.e. the following year.
1.2.15 NRS 048 means the Rationalised User Specification for Quality of Supply issued
by the South African Bureau of Standards, as revised from time to time or as
replaced by a national standard;

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1.2.16 NRS 057 means the Code of Practice For Electricity Metering issued by the
South African Bureau of Standards, as revised from time to time or as replaced by
a national standard;
1.2.17 Point(s) of Supply
means the point(s) at which a customers Electrical Installation is connected to
ESKOMs distribution / transmission system. This may or may not be the metering
point.
1.2.18 'Premises'
means the premises or property described in the Electricity Supply Agreement
and on which a supply of electricity is required by a customer.
1.2.19 Rate Component(s)
means a different charge(s) associated with a tariff, for example energy charge.
1.2.20 Reasonable and Prudent Person
means a person acting in good faith in the performance of its contractual
obligations and, in doing and in the general conduct of its business, exercising
that degree of skill, diligence, prudence, responsibility and foresight which would
reasonably and ordinarily be expected from a skilled and experienced person
complying with all legal requirements, engaged in the same or a similar type of
business, in the same or similar circumstances and conditions, and any
references herein to the standards of a Reasonable and Prudent Person shall be
construed accordingly;
1.2.21 Service Charge
means a fixed R/day charge payable per electricity account for the Month, whether
electricity is consumed or not. Where applicable, this charge will be graded
according to Eskoms standard supply sizes. The Service Charge is a contribution
towards fixed costs such as customer service costs.
1.2.22 Standard Connection Charge
means a charge payable for costs associated with a standard connection.
Standard Connection Charges incurred for new supplies or increases in supply are
payable as an up-front payment only and existing Monthly Standard Connection
Charges are payable over the remaining repayment period as agreed.
1.2.23 VAT
means value added tax as contemplated in the Value Added Tax Act (Act No 89 of
1991), as amended or re-enacted from time to time;
1.2.24 Year
means Eskoms financial year which is a period of 12 calendar months
commencing on 1 April in a calendar year and ending on 31 March in the
subsequent year.
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FORM OF ELECTRICITY SUPPLIED


2.1

Electricity shall be supplied as alternating current at the declared voltage stated in the
Electricity Supply Agreement and at a frequency of 50 hertz. ESKOM will endeavour to
maintain the electricity as near to the agreed form as circumstances and conditions will
permit, subject to the allowable deviations as specified in NRS 048-2.

2.2

On the information submitted by the CUSTOMER concerning details of its electrical


installation, ESKOM and the CUSTOMER shall agree on whether a single-phase or a
three-phase supply is required and ESKOM's decision on whether the CUSTOMER may
connect up or use any particular equipment on a single-phase supply shall be final.

CUSTOMER'S REQUIREMENTS
3.1

The CUSTOMER shall be entitled to use electricity on the premises up to the maximum
load agreed with ESKOM from time to time for the purpose of operating the equipment
notified by the CUSTOMER and agreed to by ESKOM and any additional equipment that
may be agreed by ESKOM for connection to the CUSTOMER's electrical installation.

3.2

The CUSTOMER shall not, without the written consent of ESKOM, make use of the
electricity supplied for any purpose other than that provided for in this Agreement, nor
supply any electricity taken from ESKOM to any third party.
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3.3

If a CUSTOMER who has a single-phase supply requires a three-phase supply, ESKOM


will provide a three-phase supply if such is available; but the expenses to be incurred by
ESKOM in effecting such change-over from single to three-phase supply shall be borne,
and paid in advance, by the CUSTOMER, and ESKOM shall have the right to charge an
additional Standard Connection Charge, to cover such three-phase supply costs.

3.4

In the event of the CUSTOMER applying for and ESKOM agreeing to provide an
increased or decreased supply to the CUSTOMER, ESKOM shall have the right to
decrease any existing Monthly Standard Connection Charge applicable to the decreased
supply or to charge an additional Standard Connection Charge payable up front to cover
any increase in supply.

POINT OF DELIVERY(S) / PREMISE(S)


The point of delivery shall be decided by ESKOM and shall be -

4.1

at the terminals of ESKOM's mains on the meterboard on which ESKOM's metering


equipment is installed, which meterboard shall be located as ESKOM may decide, either
on the boundary of the premises or at a point to be agreed on the premises; or

4.2

where ESKOM employs a distribution kiosk on a pavement for installation of its meters, at
the point on the boundary of the premises where ESKOM's service cable is joined to that
of the CUSTOMER; or

4.3

where an overhead connection exists, at the terminals of ESKOM's service mains


connected to the insulators or other equipment installed by the CUSTOMER on the
premises in a position approved by ESKOM.

EQUIPMENT TO BE PROVIDED BY ESKOM


5.1

ESKOM shall provide, install and maintain the meter(s) and the equipment required for
electricity delivery to the CUSTOMER at the point of delivery together with the necessary
connection from ESKOMs service mains;

5.2

Should the point of delivery be located within the CUSTOMERs premises, ESKOM shall
provide and lay on and/or across the premises, a service cable to the point of delivery
along a route to be mutually agreed on by both Parties.

EQUIPMENT TO BE PROVIDED BY THE CUSTOMER


6.1

Should ESKOM so require, the CUSTOMER shall provide to ESKOM at its own expense
suitable accommodation for the equipment and meter(s) to be installed by ESKOM. The
said meter(s) shall be maintained by ESKOM.

6.2

The CUSTOMER shall at its own expense, supply, erect, connect up, operate and
maintain, any equipment required to connect its electrical installation with the point of
supply, which equipment shall be to the approval of ESKOM.
The equipment of the CUSTOMER as well as the wiring of its electrical installation, shall
be of good design and construction, properly installed and maintained by the CUSTOMER
and shall in all respects comply with any statutory or other regulations or by-laws in force
from time to time governing the use of electricity. No extension of or addition to the
CUSTOMER's electrical installation which would require an increase in the capacity of the
supply, may be made until notice in writing has been given to ESKOM and agreement has
been reached on the terms and conditions for an increase in the CUSTOMER's supply.
ESKOM shall be entitled to recover from the CUSTOMER any loss or expenses incurred
by ESKOM by reason of damage to ESKOM's plant and equipment or otherwise by
reason of failure of the CUSTOMER to comply with the provisions of this Clause.

6.3

CUSTOMERs are cautioned that they should ascertain from ESKOM the nature of the
protection provided on the supply and should provide adequate means for the protection
of their own equipment. Inter alia,
6.3.1

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it is not practicable for ESKOM to install protective equipment on its system which
will ensure in all cases that motors and/or other equipment on the CUSTOMER's
side will be protected in the event of low voltage or over voltage or single-phasing.
It is therefore necessary for the CUSTOMER to take adequate measures to
protect its motors and/or equipment against damage that may arise under low
voltage or over voltage conditions or from single-phasing;

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6.3.2

where a voluntary or involuntary outage of supply may cause damage to the


CUSTOMER's plant or business, he should take measures to protect himself
against such possible damage.
Should the CUSTOMER have, or decide to install, its own standby generating
plant for use during such outages, the equipment for connecting such plant to its
electrical installation shall be subject to ESKOM's approval. Such standby plant
shall be operated only during such outages and furthermore the use and
operation thereof by the CUSTOMER shall be subject to such terms and
conditions as ESKOM may lay down to ensure the safety and protection of its
personnel and equipment.

ACCESS TO CUSTOMER'S PREMISES


ESKOM's authorised representatives shall have at all reasonable times free access to the
CUSTOMER's premises for the purposes of inspecting the CUSTOMER's electrical installation,
testing and reading of meters and the maintenance, recovery and removal of ESKOM's
equipment installed on the CUSTOMER's premises.

RIGHT(S)-OF-WAY
The CUSTOMER hereby grants to ESKOM, its successors-in-title, assignees, and/or licensees,
an irrevocable right-of-way in perpetuity, free of charge to transmit electricity over the property.
The said rights shall be along a route mutually agreed to by the Parties:
8.1

8.2

The right(s)-of- way shall be binding on the CUSTOMER, its heirs, assignees and
successors-in-title and shall include the following rights in favour of ESKOM:
8.1.1

the right to erect an overhead power line/underground cable(s) together with such
structures, equipment, conductors and overhead cables (works) on the property
or to erect or lead such conductors or other equipment on, under or over the
property along a route mutually agreed to, as may at any time be necessary or
convenient in exercising the right of way for overhead power line(s) / underground
cable(s) and the right to any extension(s) of such line(s) and/or cable(s) to other
consumers of ESKOM; and the CUSTOMER shall also grant to ESKOM the right
to retain any existing line(s) and/or cable(s) on the property. Any existing
servitudes pertaining to such existing lines and cables, together with the restriction
area referred to in 8.3, shall hereinafter be referred to as the Servitude Area.

8.1.2

the right to enter and be upon the property at all reasonable times in order to
construct, erect, operate, use, maintain, repair, re-erect, remove, alter or inspect
the works on the property, or in order to gain access to any adjacent properties in
the exercise of similar rights.

8.1.3

the right to have access to and egress from the power lines and the right to use
existing roads giving access to and egress from the property or roads running
across the property and gates on the property and to erect in any fence such
gates as may be necessary or convenient to gain access to and egress from any
power line/underground cable or accessory equipment.

8.1.4

the right to remove any trees, bush, grass, material or structures within the
restricted area defined in clause 8.3 hereof and the right to cut or trim any trees in
order to comply with the restrictions referred to in clause 8.3 hereof, after
consultation with the CUSTOMER.

ESKOM shall
conditions -

exercise

its

rights

subject

to

the

following

terms

and

8.2.1

ESKOM shall ensure that any gates used by its personnel shall be kept closed.

8.2.2

ESKOM shall pay compensation:


8.2.2.1 where damage is caused intentionally to any property by ESKOM, its
employees or contractors, to enable ESKOM to use or continue to use the
servitude area for its intended purpose.
8.2.2.2 where damage or injury is caused by any negligent act or omission on the
part of ESKOM, its employees or contractors. Such liability shall be
limited to direct damages, excluding consequential damages.

8.3

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The following special restrictions are placed on the use of the property (in the Servitude
Area) namely P 5 of 12

8.3.1

The CUSTOMER shall ensure that no building or structure may be erected or


installed above or below the surface of the ground, neither may any material which
might endanger the safety of the power line/underground cable be placed within a
distance as set out in the Table below of the centre line of this power
line/underground cable without the prior written permission of ESKOM.
Line Voltage

8.4

Clearance from Centre Line

11kV & 22kV

9m

66kV

11m

132kV

15,5m

8.3.2

No mining activities or blasting operations shall be permitted within


500 (five hundred) meters of any power line/underground cable without the prior
written permission of ESKOM.

8.3.3

The CUSTOMER shall not plant or allow to grow any tree in the Servitude Area
nor plant or allow to grow in the vicinity of a power line/underground cable any tree
that could grow to a height in excess of the horizontal distance of that tree from
the nearest conductor of such power line or allow it to grow in such a manner as
to endanger that line should it fall or be cut down.

The CUSTOMER shall ensure that the right-of-way hereby granted to ESKOM
8.4.1

shall be brought to the attention of any purchaser or transferee of the property (or
of any portion of the property) by the CUSTOMER or the seller (at that time) of the
property before the property (or any portion thereof) is sold and/or transferred to
such purchaser or transferee.

8.4.2

shall, if ESKOM so requests and at ESKOMs costs and by Notary appointed by


ESKOM for this purpose, be incorporated into a Notarial Deed of Servitude and be
registered against the title deed under which the property is held. The
CUSTOMER and/or its heirs, assignees and successors-in-title shall perform all
necessary actions and sign all necessary documents to achieve the notarial
execution and registration (in the office of the Registrar of Deeds) of a deed of
servitude, as envisaged above.

8.5

If the CUSTOMER is not the owner of the premises as set out in 8.1, the CUSTOMER
shall be required to obtain from the owner of the property a grant to ESKOM of such
right(s)-of-way, free of charge, over the property. Should the CUSTOMER fail to do so,
he/she/it will be liable for the costs of relocation of electrical services requested by the
owner.

8.6

If any alteration is required by the CUSTOMER to ESKOM's overhead line or service


cable or the position of ESKOM's equipment or meters, or is required by reason of the
modification of the CUSTOMERs consent, the expenses to be incurred by ESKOM in
effecting the alteration or removal shall be borne, and paid in advance, by the
CUSTOMER.

8.7

The CUSTOMERs application is further subject to ESKOM acquiring a T-off right or


extended right from an adjacent land owner to connect a power line supply to the
CUSTOMER. The CUSTOMER shall have no claim against ESKOM for damages due to a
loss suffered by him/it as a result of a delay in supplying the CUSTOMER with electricity
caused for whichever reason, as aforementioned.

COMMENCEMENT OF SUPPLY
The supply of electricity shall, subject to compliance by the CUSTOMER with ESKOM's
requirements for the provision thereof, be made available by ESKOM on a date to be advised to
the CUSTOMER by ESKOM or as soon thereafter as practicable unless it is agreed in writing
between the CUSTOMER and ESKOM that the supply be made available at an earlier date.

10

CONNECTION/CONVERSION/TRANSFER FEE
The CUSTOMER shall, on signing the Electricity Supply Agreement, pay to ESKOM a connection,
conversion or transfer fee, as the case may be, and, notwithstanding the payment of such fee,
any line, cable, meter or other equipment provided and installed by ESKOM on the premises shall

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remain the absolute property of ESKOM who shall be entitled to recover and remove the same on
termination of the supply to the CUSTOMER.
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12

SECURITY - ELECTRICITY ACCOUNTS


11.1

As security for the due payment of the accounts to be rendered in terms of Clauses 12
and 13, the CUSTOMER shall, on signing the Electricity Supply Agreement, or on a date
as agreed, deposit with ESKOM a sum of money or furnish ESKOM with a guarantee
acceptable to ESKOM.

11.2

The amount of the deposit or guarantee may be varied by ESKOM at any time so that the
amount of the security shall be sufficient to cover the estimated amount payable by the
CUSTOMER for electricity during any period of three months.

11.3

ESKOM shall have the right at any time to allocate the whole or any portion of the deposit
paid or the proceeds of the guarantee furnished to ESKOM in terms hereof, towards the
payment of any amounts payable by the CUSTOMER for electricity supplied and which
are in arrears, provided that should the whole of or any portion of the deposit or proceeds
of the guarantee be allocated by ESKOM at any time, the CUSTOMER shall be obliged
forthwith to reinstate the deposit or replace the guarantee to ESKOM's satisfaction.

11.4

The said deposit or guarantee, as the case may be, shall be returned to the CUSTOMER
upon termination of this Agreement and final settlement of any amounts owing to ESKOM.

11.5

The said deposit shall bear interest, capitalised annually, at the prevailing rate as
determined by ESKOM from time to time.

11.6

In the event of the final account not being settled, ESKOM shall be entitled to apply the
deposit to any outstanding amounts owing to ESKOM, or if ESKOM holds a guarantee, to
call up the said guarantee without any notice to the CUSTOMER.

PRICES TO BE CHARGED
12.1

The prices payable by the CUSTOMER for the supply of electricity shall be the prices set
out in the appropriate tariff specified in the ESKOM Schedule of Standard Prices, subject
however to ESKOMs right to adjust its prices it charges for electricity supplied with the
approval of NERSA.
Where the appropriate tariff provides for a network charge to be paid, such charge shall
be payable for a period not less than the notice period set out in Clause 3 of the Electricity
Supply Agreement.
Particulars of the tariff at present in force for the supply to the CUSTOMER are as stated
in Annexure 'B'.

12.2

In order to ensure that ESKOM's costs of providing the supply of electricity to the
CUSTOMER will be covered by the revenue received, the supply may be subject to a
Standard Connection Charge (SCC) in addition to the prices to be charged under the tariff
referred to in subclause 12.1.
The said SCC shall be payable by the CUSTOMER as an up front payment only for
connection charges incurred for new supplies or increases in supply. Existing Monthly
Standard Connection Charges shall be payable for the duration of the Electricity Supply
Agreement; subject however to the proviso that the applicable SCC shall be payable for a
period not less than the notice period as set out in Clause 3 of the Electricity Supply
Agreement and for a period not exceeding 25 (twenty-five) years reckoned from the date
the supply to the premises is first made available.
Existing Monthly Standard Connection Charges originally based on a variable interest rate
are calculated at a premium of 2% above the prime interest rate of First National Bank.
The said financing rate is linked to the prime interest rate of First National Bank and will
fluctuate in line with this prime interest rate. As a result the Monthly Standard Connection
Charges specified in the Electricity Supply Agreement which have been calculated using a
variable interest rate shall fluctuate in line with any variance in the prime interest rate of
First National Bank.

12.3

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The charges under this Clause shall be payable whether any electricity is consumed in
any month or not and shall be reckoned from the date on which electricity is first supplied
to the CUSTOMER or from the date ESKOM notifies the CUSTOMER that it is ready to
commence the supply, whichever date is the earlier.

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12.4

13

Should the CUSTOMER terminate this Agreement before the expiry of the notice period
as set out in the Electricity Supply Agreement, the outstanding charges payable in terms of
subclauses 12.1 and 12.2 shall be raised as a once off payment.

PAYMENT OF ELECTRICITY ACCOUNTS


13.1

Accounts for all charges payable by the CUSTOMER shall be sent to the CUSTOMER as
soon as possible after the end of each month (see definition of month in Clause 1 of this
Annexure), and each account shall be due and payable on the date the account is
received by the CUSTOMER, which date, for purposes of this Agreement, shall be
deemed to be not later than 7 (seven) days from the date of the account.

13.2

Should payment not be received within a period of 23 (twenty-three) days from the date
the account is deemed to have become due and payable in terms of subclause 13.1,
ESKOM may discontinue the supply to the CUSTOMER and/or terminate this Agreement
after having given the CUSTOMER 14 (fourteen) days written notice. The amount
outstanding shall bear interest compounded monthly from the date the account is deemed
to have become due and payable in terms of subclause 13.1 to the date of payment, at a
rate per annum equal to the prevailing prime overdraft rate charged by First National Bank
of Southern Africa Limited plus 5% (five percent).

13.3

Should the CUSTOMER dispute an account, it shall not be entitled to reduce or set off its
debt or defer payment thereof beyond the period of grace allowed for in subclause 13.2;
but such account shall as soon as possible thereafter be adjusted if necessary.

13.4

Should the CUSTOMER be incorrectly charged for any amount[s] payable in terms of this
Agreement as a result of human error, ESKOM shall inform the CUSTOMER of the
correct amount[s] payable and the reasons therefor.
In the case of the CUSTOMER being overcharged and having paid such overcharged
amount, ESKOM shall as soon as practicable either credit the CUSTOMERs electricity
account or reimburse the CUSTOMER with the total amount overcharged. The said
amount shall include interest, compounded monthly from the date the CUSTOMER has
paid the overcharged amount up to the date ESKOM has credited the CUSTOMER's
electricity account or has repaid the CUSTOMER, as the case may be, at a rate per
annum equal to the prevailing prime overdraft rate charged by First National Bank of
Southern Africa Limited.
In the case of the CUSTOMER being undercharged, ESKOM shall debit the
CUSTOMERs electricity account with the total amount undercharged and such amount
shall be payable by the CUSTOMER on such terms as may be agreed to by ESKOM;
subject to the proviso that the CUSTOMER may pay the amount over a period
commensurate with the amount undercharged, but such period shall be limited to a
maximum period of 6 (six) months. The amount outstanding shall bear interest,
compounded monthly, from the date the CUSTOMERs account has been debited in
terms of this Clause to date of payment, at a rate per annum equal to the prevailing prime
overdraft rate charged by First National Bank of Southern Africa Limited.

13.5

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A certificate under the signature of a duly authorised employee of ESKOM setting out the
amount due and payable by the CUSTOMER at any time in terms of this Agreement, shall
be sufficient and conclusive proof, subject to manifest error, of the CUSTOMER's debt for
the purpose of insolvency and legal proceedings and the obtaining of provisional
sentence.

ACCOUNTS AND NOTICES


14.1

Electricity accounts shall be addressed to the CUSTOMER at its postal address set out in
the Electricity Supply Agreement; and any notice to the CUSTOMER in respect of any
other matter arising from this Agreement shall at ESKOM's option be served either at the
address of the premises to be supplied, or at the alternative physical address of the
CUSTOMER stated herein, or at the CUSTOMER's postal address.

14.2

Notices/accounts posted to the CUSTOMER shall be deemed received by the


th
CUSTOMER on the 7 (seventh) day after the date of the notice/account.

14.3

Notices to ESKOM shall be addressed to the postal address set out in this Agreement or
at such other place as ESKOM may from time to time direct; and if sent by letter shall be
th
deemed to have reached ESKOM on the 7 (seventh) day after the date of posting.

14.4

The CUSTOMER chooses domicilia citandi et executandi for all purposes of this
Agreement at the address of the premises to be supplied with electricity as well as at the
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alternative physical address furnished by the CUSTOMER. ESKOM shall be entitled to


use either of the aforementioned addresses for purposes of litigation in terms hereof.
ESKOM chooses its domicilium citandi et executandi as
Megawatt Park
Maxwell Drive
Sunninghill Ext. 5
SANDTON
15

METER-READINGS AND RENDERING OF ACCOUNTS


15.1

The meter(s) shall be read at such intervals of months as ESKOM may decide; provided
that in the event of the period between successive meter-readings being longer than one
month, an estimated account shall be rendered to the CUSTOMER for each month
between meter-readings and an adjustment account shall be rendered after the meters
are next read based on the actual consumption of electrical energy then determined.

15.2

Should the CUSTOMER prefer to have his account based on actual meter-readings for
those months where ESKOM would normally render an estimated account, the
CUSTOMER has the option to inform ESKOM timeously of the actual monthly readings on
which to base his account.
The decision on whether to base the account on such readings or on estimated
consumption for a specific month, is at the sole discretion of ESKOM.
ESKOM shall also render an adjustment account after the meters are next read, based
on the actual consumption of electrical energy then determined.

16

METER TESTING
16.1

If within 14 (fourteen) days of the rendering of any monthly account for electricity supplied,
the CUSTOMER requests ESKOM in writing to test any or all of the meters, ESKOM shall
do so on payment by the CUSTOMER of the appropriate test fee and if such test shows
that the inaccuracy of any meter is within the percentage accuracy as specified in
NRS 057, the meter shall be considered as correct and the account shall stand as
rendered; but if the test shows the inaccuracy to be in excess the percentage accuracy as
specified in NRS 057, the same shall in the absence of evidence to the contrary be
deemed to have existed since the date the error or fault can be reasonably shown to have
occurred, and the account shall be adjusted accordingly in the first account rendered after
the inaccuracy has been ascertained, and the test fee shall be refunded to the
CUSTOMER.
If the test shows the inaccuracy to be less than the percentage accuracy as specified in
NRS 057, the test fee paid by the CUSTOMER shall be forfeited to ESKOM.

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16.2

ESKOM shall have the right to test any of the meters at any time and if any such test shall
show any inaccuracy in excess of the percentage accuracy as specified in NRS 057, the
same shall be deemed to have existed since the date the error or fault can be reasonably
shown to have occurred, and the account shall be adjusted accordingly in the first account
rendered after the inaccuracy has been ascertained.

16.3

Should any inaccuracy be as a result of the meters being tampered with, the inaccuracy
shall be deemed to have existed since the date of the last inspection or test conducted on
the said meters and associated equipment.

POWER FACTOR, PHASE BALANCE


AND INTERFERENCE WITH OTHER SUPPLIES
17.1

The power factor of the supply consumed by the CUSTOMER for small power purposes
shall at all times be to the approval of ESKOM.

17.2

Where the CUSTOMER is provided with a three-phase supply, it shall balance the
requirements of its load between the phases to the reasonable approval of ESKOM.

17.3

The CUSTOMER shall so use the supply as not to interfere with an efficient and
economical supply to other consumers, and shall at all times ensure that any voltage
distortions caused by the CUSTOMER's load shall not exceed the values specified by
ESKOM from time to time.
When supplied from an 11 or 22kV network, the CUSTOMER shall ensure before
connecting to its electrical installation any motor that may be started direct-on-line or with

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a star-delta starter, that such motor does not exceed such maximum permissible size as
laid down by ESKOM in respect of the network in question.
18

CUSTOMER NOT TO INTERFERE WITH ESKOM'S EQUIPMENT


The CUSTOMER shall not, except in cases of emergency, or at the request of ESKOM, operate
or interfere with the equipment of ESKOM.

19

CONTINUITY, REDUCTION OR VARIATION OF SUPPLY


19.1

20

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ESKOM shall take all reasonable precautions to procure and maintain suitable plant for
the generation and distribution of electricity calculated to secure to its consumers a
constant supply of electricity and shall procure efficient technical staff to control such
plant, but ESKOM does not guarantee that the same will always be maintained, and
ESKOM shall not be liable for damages, expenses or costs caused to the CUSTOMER
from any interruption in the supply, variation of voltage, variation of frequency, any failure
to supply a balanced three-phase current or failure to supply electricity unless the said
interruption or failure is due to the negligence of ESKOM in failing to carry out its
obligations aforesaid. In the event that ESKOM should be liable for damage caused to the
CUSTOMER as a result of any such reduction in load or any interruption in the supply, or
any variation of voltage or frequency or any failure to supply electricity, such liability shall
be limited to direct damage only.

SUPPLY OF ELECTRICITY UNDER EMERGENCY CONDITIONS, ENERGY AND/OR


CAPACITY CONSTRAINTS
20.1

It is specifically recorded that Eskom is experiencing electricity generation, transmission


and distribution constraints and also stability constraints of its interconnected power
system. It must be noted that capacity is going to be severely constrained for the next 7 to
10 years and that electricity must be used as efficiently as possible.

20.2

From time to time Eskom may have a shortage of generation capacity and may not be
able to meet the energy and capacity required by all its customers.

20.3

Nothing herein shall be construed as limiting the right of Eskom to temporarily interrupt or
reduce the supply of electricity to its customers or to require customers to reduce their
demand for the supply of electricity.

20.4

In addition:
(a)

You are requested to use energy efficient technologies and equipment in


accordance with best international practice on specific application e.g. lighting,
heating/cooling, induction loads etc;

(b)

You shall not exceed the monthly energy allocation for your electrical installation.
In determining the monthly energy allocation for your electrical installation it will
be assumed that you will comply with the requirement to use energy efficiency
technologies and equipment referred to in paragraph 20.4 (a) above;

(c)

Should your monthly consumption exceed your monthly energy allocation Eskom
shall be entitled to reduce or terminate the supply of electricity to your electrical
installation. Alternatively, Eskom may charge you an increased tariff in
accordance with tariffs prescribed by NERSA; and

(d)

should Eskom and/or NERSA in future introduce (for purposes of managing


energy supply to its customers, generation capacity or network capacity
constraints on its electricity system) any programme or scheme whereby its
customers are required to reduce their consumption, or terminate their
consumption of electricity or, whereby Eskom is required to reduce or terminate
the supply of electricity to customers, you will be required to participate and
reduce your electricity consumption as required in terms of such programme or
scheme and the terms and conditions as set out in the Electricity Supply
Agreement and this Conditions of Supply Annexure shall be amended
accordingly for the duration of such programme or scheme.

20.5

You will be required to collaborate in determining the portion of your load which Eskom
will reduce through its under-frequency load shedding scheme.

20.6

You will be required to comply with the provisions of the Distribution Code.

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21

22

DISCONNECTION OF SUPPLY, LEGAL PROCEEDINGS AND COSTS


21.1

On request of the CUSTOMER, ESKOM will disconnect the supply for any temporary
period but the CUSTOMER will continue, for the period of temporary disconnection, to be
liable for the charges provided for under the provisions of Clause 12 of this Annexure.

21.2

Should the CUSTOMER fail to comply fully with any of the conditions of the Agreement
and this Annexure thereto, other than the failure to pay any account in accordance with
the provisions of Clause 13 of this Annexure, ESKOM shall be entitled to give the
CUSTOMER notice to remedy the default; and if the CUSTOMER fails to remedy the
default within 14 (fourteen) days of receipt of such notice, ESKOM may, without prejudice
to its rights to obtain payment of all amounts due by the CUSTOMER and to claim
damages, if any, discontinue the supply and terminate this Agreement .

21.3

Should the CUSTOMER be placed in liquidation or under sequestration, whether


voluntary or compulsory, ESKOM shall be entitled to terminate this Agreement without
notice, discontinue the supply of electricity and to claim payment forthwith of all amounts
outstanding, including interest, together with all expenses incidental to the disconnection
of the supply by ESKOM and any other amounts payable by the CUSTOMER.

21.4

ESKOM may discontinue the supply immediately if the CUSTOMER has allowed the
accommodation for ESKOM's equipment or any part of its electrical installation to become
defective so as in the opinion of ESKOM's representative to be a danger to life or
property. ESKOM shall notify the CUSTOMER in writing of the disconnection and shall
restore the supply once the cause of disconnection has been remedied.

21.5

Before a supply which has been disconnected under the provisions of this Annexure is
reconnected, the CUSTOMER shall pay all arrears due to ESKOM and the reconnection
fee for the area in which the CUSTOMER is situated, and furthermore, if required to do so
by ESKOM, shall provide an additional deposit or increased guarantee, as the case may
be, as is provided for in Clause 11 of this Annexure.

21.6

The CUSTOMER hereby consents to the jurisdiction of the Magistrate's Court in respect
of any action or proceedings which may be brought against him by ESKOM under or in
connection with this Agreement. Notwithstanding the aforegoing, ESKOM shall be entitled
to bring proceedings in the High Court where such proceedings would, but for the
aforegoing consent, fall outside the jurisdiction of the Magistrate's Court.

21.7

Should the CUSTOMER commit any breach of this Agreement and ESKOM resorts to
litigation, the CUSTOMER shall be responsible for all costs and expenses incurred by
ESKOM as a result of such litigation including Attorney and Client costs, collection,
commission and tracing fees.

PERIOD OF AGREEMENT
This Agreement shall come into force on the date of signing thereof and shall be terminable in
accordance with the specific provisions contained in the Electricity Supply Agreement and this
annexure thereto.

23

DISPUTES AND DISPUTE RESOLUTION


23.1

The CUSTOMER and ESKOM shall endeavour to resolve by informal negotiation any
dispute between them in connection with or arising from the construction, interpretation,
performance or non-performance or termination of this Agreement and any related or
subsequent agreement or amendments thereto, but if agreement cannot be reached
within 30 (thirty) days of the dispute arising, such dispute shall be finally resolved in terms
of the Rules of the Arbitration Foundation of Southern Africa by an arbitrator formally
appointed by the Foundation.

23.2

The language of the arbitration shall be English and such arbitration shall be held in
Johannesburg, unless the Parties agree otherwise.
Notwithstanding the provisions of sub-clauses 23.1 and 23.2, any Party to this Agreement
may seek urgent interim relief from a competent court.

23.3
24

CESSION AND DELEGATION OF RIGHTS AND LIABILITIES


24.1

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This Clause is severable from the rest of this Agreement and will remain in effect even if
this Agreement is terminated, lapses or is declared invalid for any reason.

Neither Party hereto may cede and delegate any of its rights and obligations (including
liabilities) under this Agreement to any person without the written consent of the other.
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24.2

25

Notwithstanding the above, ESKOM may on written notice to the other Party cede and
delegate its rights and obligations under this Agreement to any of its subsidiaries or any of
its present divisions or operations which may be converted into separate legal entities as
a result of the restructuring of the Electricity Supply Industry (ESI) and the Electricity
Distribution Industry (EDI).

FORCE MAJEURE
25.1

If a Party (the Affected Party) is unable to perform all or part of its obligations in terms of
this Agreement due to a Force Majeure Event, the Affected Party shall, as soon as
reasonably practicable but no later than 48 (forty-eight hours) of it becoming aware of the
Force Majeure Event, notify the other Party in writing (a Force Majeure Notice) setting
out:
25.1.1 full particulars of the Force Majeure Event;
25.1.2 the impact of the Force Majeure Event on the Affected Party's obligations under
this Agreement;
25.1.3 the Affected Partys reasonable estimate of the length of time which its
performance has been and will be affected by such Force Majeure Event; and
25.1.4 the steps which it is taking or intends to take or will take to remove and mitigate
the adverse consequences of the Force Majeure Event on its performance
hereunder.

25.2

The Affected Party shall have the burden of proving both the existence of any Force
Majeure Event and the effect (both as to nature and extent) which any such Force
Majeure Event has on its performance.

25.3

If the Parties are, on the basis of the Force Majeure Notice and any supporting
documentation, unable to agree as to the existence or as to the effect of a Force Majeure
Event by the date falling sixty (60) days after the receipt by the non-Affected Party of the
Force Majeure Notice, either Party shall be entitled to refer the matter to arbitration in
accordance with Clause 23 of this Annexure.

25.4

If it is agreed or determined that a Force Majeure Event has occurred, the Affected Party
shall, provided that it has complied with the requirements of this Clause 25, not be liable
for any failure to perform an obligation under this Agreement to the extent that:
25.4.1 such performance is prevented, hindered or delayed by a Force Majeure Event;
and
25.4.2 such failure could not have been mitigated by the Affected Party (acting as a
Reasonable and Prudent Person).

25.5

The Affected Party shall use all reasonable efforts to mitigate, rectify and overcome the
effects of any Force Majeure Event(s) and to minimise the effect on the other Party and
shall give the other Party (i) regular reports on the progress of the mitigation measures
and (ii) prompt notice on the cessation of the Force Majeure Event(s).

25.6

If the Force Majeure Event subsists for more than 90 (ninety) consecutive days, the nonAffected Party shall have the right to terminate this Agreement after having given the other
Party 14 days written notice without prejudice to any claim either Party may have in terms
of this Agreement.
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