Eskom sells direct to those municipalities. The municipalities put on around a 100% markup and then sell the service on to you the end user.
Imagine you live in a tiny little village in the middle of nowhere with a single local no-name-brand petrol station. If they don't pay the bulk petrol supplier, the bulk petrol supplier stops giving them petrol. You can't go sue the bulk petrol supplier because you can't get petrol from your local station down the road.
Even going forwards there's not much you can do, the electricity you got in the past and which you paid for was electricity you actually used. When the municipality sends out the debt collectors, you'll be spared. If the municipality does not send out debt collectors, then you know you're living in an area run by a bunch of crooks (because it will mean that everybody was paying their electricity bill but the municipality was "creatively" diverting that money away from their own Eskom bill) and its time to move out!
I actually think this is an awesome move, because it means that the municipalities which are paying their Eskom bills will get less load shedding. It also means that those municipalities will be selling more electricity (you can't sell electricity when Eskom isn't giving you any). Which means that the municipalities are getting their full cut of their anticipated markup on the wholesale price, which is used for subsidising your rates (well, in the form that if the municipality doesn't get that money from electricity sales, it ups your rates and gets the money from there instead).
