"Increase in electricity prices without fixing Eskom is a threat to SA citizen's human rights!" - SAFCEI

MEDIA RELEASE

21 MARCH 2019

“INCREASING ELECTRICITY PRICES WITHOUT FIXING ESKOM IS A THREAT TO SA CITIZENS’ HUMAN RIGHTS!” – SAFCEI

“The National Energy Regulator’s (NERSA) approval of Eskom’s price increases – starting with 9.4% from 1 April 2019, followed by increases of 8.1% in 2020 and 5.2% in 2021 – is a threat to human rights,” says the Southern African Faith Communities’ Environment Institute (SAFCEI). This increase is in addition to the 4.41% increase already approved last year.

In SAFCEI’s view, NERSA seems unable to regulate South Africa’s energy sector, or make decisions that are in the public’s interest as the country struggles with increased and unpredictable load shedding, as well as the impacts of climate change, at present being felt in the severe impacts of Cyclone Idai in Mozambique, Zimbabwe and Malawi. The impact of this poor governance by NERSA amounts to a violation of citizens’ human rights as people are unable to receive adequate medical care, travel safely, be educated or perform their jobs under these conditions.

SAFCEI’s Energy Justice Coordinator, Vainola Makan says, “The heavy measures we have experienced recently – such as a Stage 4 shutdown over a weekend in summer when electricity demand is significantly lower – signifies that there are big troubles at Eskom, which need to be addressed immediately. Eskom has become a liability to the people and the economy of this country. And without addressing the issues, and also granting tariff increases, NERSA is further enabling the country’s decline.”

“We are totally against the poor being billed for the mismanagement and corruption at Eskom. It is not fair to expect South African citizens to continue to effectively bear the brunt, particularly since we still have no idea how the organisation intends to manage its debt and clean up corrupt practices within its ranks. It is also not fair to continue to allow lavish overspending on executive salaries and unsustainable coal plants, and then expect the poor to tighten up their belts further and bailout Eskom, especially since we have seen no repercussions for those guilty of misbehaviour and bad decision-making,” says Makan.

She says that SAFCEI has called attention to the deteriorating situation at the state-owned enterprise (SOE) for a number of years, particularly in light of its role in the illegal R1-trillion nuclear deal. And, even during this time, NERSA continued to approve Eskom’s above-inflation price increases. “However, it is not clear what happened to these funds, because here we sit with intensified load shedding and face the very real threat of a total blackout in the near future.”

On top of the extensive claims of corruption being exposed at the Zondo Commission, the Medupi and Kusile coal power stations are costing taxpayers increasing costs of more than R400-billion and are prime examples of the poor decision-making at Eskom. Currently, neither plant is running on full capacity, and the units that are working, are not fully functional. On top of this, an investigation into irregularities around the construction of these power stations has been initiated, since the American company that provided ineffective equipment, continues to receive billions of rand from Eskom.

Wendy Pekeur, a community leader based in rural Stellenbosch says, “We were so disappointed to hear that NERSA has granted Eskom another increase. This means that we – the rural poor of this country – have to carry the burden of more than 13% on electricity prices for 2019 alone. We are already suffering under high inflation, huge increases in water bills, transport costs, and the prices of food have increased tremendously.

“It is clear that NERSA did not take any of our concerns with regards to economic challenges, especially for rural women into consideration – who bear the brunt of an unequal trade regime and precarious employment, and are being pushed further into the informal economy, as well as unemployment. Instead, NERSA has once again shown that they serve the interest of business whose negligence, corruption, and maladministration led us to all the problems we are facing in the energy sector at the moment,” says Pekeur.

Francesca de Gasparis, SAFCEI’s Executive Director says, “If Eskom is meant to support industry and encourage job security, how do we justify above-inflation tariff hikes for a failing entity in a stagnant economy? Eskom’s price increases will directly and negatively impact the country’s economic growth. With these prices, how does NERSA expect poorer citizens to survive, much less get themselves out of poverty and create small enterprise opportunities?”

“SAFCEI calls for ethical decision making at NERSA and urges the regulator to be guided by its commitment to serve the people of this country and secure a sustainable future. NERSA must take decisive action on Eskom, which has been self-destructing for many years. Price increases and other bailouts are not sustainable and are doing far worse damage to the country and its people. Eskom also has to find workable solutions to deal with municipalities’ growing unpaid electricity bills, and show leadership for the just transition for job creation and retraining into a low carbon economy. NERSA has to start at the root of the problem, not with the people, who already have their backs against the wall,” says de Gasparis.

Adds de Gasparis, “It makes no sense that citizens have to pay more for such a poor service that does not serve them now, nor their future interests. Now is the time for us to explore the alternatives, such as with renewable energy, as a means of alleviating the pressures on the grid and creating a just future for all of South Africa.”

ENDS

Issued by Natasha Adonis, on behalf of SAFCEI. For more information, contact Natasha on 0797-999-654 (also available on WhatsApp).