SAFCEI joins with civil society in opposing Eskom’s requested tariff increases

SAFCEI MEDIA RELEASE

18 JANUARY 2019

From 14 January, the National Energy Regulator (NERSA) started its public hearings on Eskom’s proposed electricity price hike of 15% for 2019, with a projected overall increase of 45% to 2021. The Southern African Faith Communities’ Environment Institute (SAFCEI) – along with faith-based and environmental partners, and also members of the public – presented a variety of compelling arguments to NERSA, opposing these requests. A number of communities were represented, including Mitchell’s Plain, Bellville, Gugulethu and Khayelitsha.

Vainola Makan, SAFCEI’s Energy Justice Coordinator, says “If granted, this price increase will severely impact all electricity consumers across the country, many of whom already struggle to pay their daily bills. Citizens should not have to suffer energy increases every year. It would be far more responsible for Eskom to recover the funds it has lost through mismanagement over many years.”

Says Makan, a resident of Bellville, “Whilst load-shedding remains a constant threat, Eskom does not seem to be thinking about the country’s energy future in a rational or sustainable way. As it stands, the SOE does not seem to have the public's interest at heart. It is clear that there is an urgent need for restructuring and improved management of the utility.”

SAFCEI believes that ethical custodianship of the Earth’s resources is essential to sustainable development, and urges NERSA to operate on a value-based system that places the needs of all citizens at the forefront of its agenda. The NPO further proposes a refocusing of Eskom’s vision, to ensure that it promotes the much-needed shift to clean energy solutions. The reskilling of workers should be a primary focus, since this will ensure that our transition from dirty, high-risk energy to clean, renewable energy is just and serves the public’s interest.

Wendy Pekeur, a community leader from Elsenberg in Stellenbosch and founder of the Ubuntu Rural Women and Youth Movement says, “It was very enlightening to participate in the NERSA hearing. One thing is very clear, Eskom is in deep trouble as a result of accumulating years of debt. And, it seems that since it could always rely on government for a bail-out, it has become reckless and negligent.

In her presentation to NERSA, Pekeur emphasised that corruption, maladministration and mismanagement have basically left Eskom bankrupt: “And, what does it want to do now? Now it wants to recover that monies from the consumer. I know too many people who are struggling to keep their heads above water. I can confirm that people are going back to the old ways of paraffin, candles, gas and outside fires, because electricity prices are just too high. That is why we need energy justice now, because electricity provided by the country’s energy supplier should not only be affordable to the rich. Eskom must get its house in order.”

Adds Pekeur, “Today I speak for farm workers and rural people in my community and around the country, who cannot afford the proposed increase, but are unable to access the NERSA hearings. In one example, the household electricity bill for a retired farmworker’s household comes to more than R1,000 per month. This is because the only place he can buy electricity is from the farmer”.

Levona Carstens from Tafelsig in Mitchell’s Plain says, “I am a pensioner and already can’t survive on the social grants provided by the government. On top of this, electricity prices are already so unaffordable, since we only get a few units per ten rand. Eskom and NERSA must consider us pensioners. We are struggling to survive.”

Lydia Petersen from Mitchell’s Plain, who joined with Project 90 by 2030, says, “We are concerned about Eskom’s proposed price increase, because our communities cannot afford it. There is too much poverty as it is, and yet there are no lifelines for the people. This proposed 15% hike will just throw us into further poverty, which we just cannot afford.

“Communities need to stand together against the powers that be, such as Eskom, and let them know that enough is enough. We will not enrich the management of Eskom, and the maladministration and misappropriation of funds must come to an end.  And, we as communities must stand up!” says Petersen.

Community leader, Ann October, representing pensioners in Eastridge in Mitchell’s Plain says, “Eskom and NERSA, what are you going to do, because our people are suffering, and cannot afford another tariff hike? After people have paid for electricity and water, which are both already so expensive, they have nothing left. Now people are turning to loan sharks for help, which is not good. On top of that, we already have to deal with other problems, such as drugs and gangsterism in our communities. Why are you not doing more to create jobs for our people? On behalf of my community, we demand 0% increase.”

Also presenting was Sizwe Manqele from Khayelitsha, a SAFCEI Youth Champion. He says, “I was at NERSA to express my voice as a citizen. There are various issues on Eskom that NERSA needs to look at, particularly regarding how it is run. Is Eskom a public entity concerned with improving the quality of the lives of South Africans, or is it a private company looking to make profits for its management and shareholders?”

“The cost of many other basics has increased dramatically. What will the impact be on the poor, if they still have to contend with the additional burden of an increase in the cost of electricity? If granted, Eskom’s price hikes will amount to energy warfare on the poor. Furthermore, water is another resource at risk, since there are lots of droughts happening, due to global warming,” adds Manqele.

Joyce Malebu from the Gugulethu Backyarders Association says, “I represent mostly the pensioners and the backyard dwellers – those who live in shacks in the yards of houses. NERSA needs to think about the poorest of the poor, who either rely on a very low government grant or who are unemployed with absolutely no income, not even a grant. Where must these people get money for electricity to live? We rely on electricity for so many things, but now people must go back to paraffin – which is dangerous, and can lead to shack fires.”

Says Malebu, “How can NERSA, in good faith toward the country’s citizens, grant an increase to Eskom? The people can’t afford it, because electricity is already unaffordable. Those people working at Eskom and NERSA, you’ve got money and earn high salaries. What about those who don’t have any money?”

Communities in attendance were happy to see a rigorous and impartial manner from NERSA during the hearings. However, they asked that NERSA hosts these hearings in the communities – rather than in the City in lavish Hotels – so that more people affected have a platform to give their inputs, and would welcome a public response from Eskom, with a guarantee that the poor should be cushioned from the economic effects of any tariff increase.

NERSA’s public hearings will continue in a number of provinces, until 4 February. To access SAFCEI’s submissions or to learn more about energy and eco-justice, go to www.safcei.org

ENDS

Issued by Natasha Adonis, on behalf of the Southern African Faith Communities’ Environment Institute (SAFCEI). For more information, contact Natasha on 0797-999-654 (also on WhatsApp) or natasha@safcei.org.za.

Note to Editor:

• The troubled state-owned enterprise (SOE) made its Third Multi-Year Price Determination Regulatory Clearing Account (RCA) Year 5 (2017/18) and Fourth Multi-Year Price Determination (MYPD4) applications to NERSA last year.

• The Regulatory Clearing Account (RCA) is a monitoring and tracking mechanism that compares certain uncontrollable costs and revenues assumed in the MYPD decision (made by the National Energy Regulator of South Africa (NERSA)) to actual costs and revenues incurred by Eskom.

• A "RCA" application, is an application for revenue related to cost recovery and revenue adjustments based on actual past variances, or backward looking reconciliation. It is NOT a revenue application based on future estimates. Eskom RCA Presentation at the NERSA hearing.

• SAFCEI provided input into the MYPD3 Eskom Application, the DoE IRP2010 and the updated 2013IRP, the draft Integrated Energy Plan (IEP) first 2010 carbon tax discussion paper, the 2013 carbon tax discussion paper, the Davis Committee on the Carbon Tax, the selective reopener of the MYPD3 of 2015 and RCA applications for 2013/2014, 2014/2015, 2015/2016.  Recently, SAFCEI submitted comment to both the DoE and Parliament on the draft IRP2018.

• Eskom’s financial crisis and the viability of coal fired power in SA. Grove Steyn, Jesse Burton, Marco Steenkamp Nov 2017 http://meridianeconomics.co.za/wp-content/uploads/Eskoms-financial-crisis-and-the-viability-of-coalfired-power-in-SA_ME_20171115.pdf