Khulumani calls on Nersa to reject Eskom’s application for a 25,3% price increase on 29 June 2015 in the context of already disastrous impacts of the April 2015 increases on the living conditions of people in poor communities

Khulumani Support Group joins its social justice partners in declaring that electricity is a public good that must be accessible to all the country’s people. The present request from Eskom to the National Energy Regulator in South Africa (Nersa) for a 25,3% price increase for the 2015/16 and 2017/18 financial years, puts electricity out of reach of poor people and threatens to reverse hard-won gains made by government in providing access to electricity for poor communities.

Poor people have already been adversely affected with a deterioration in their living standards by the price increases granted to Eskom in April 2015. They have been forced to resort to using paraffin for cooking and candles for lighting with their accompanying risks of fire and the destruction of property. With poor people standing to lose the most from Eskom’s latest application for further price increases, Khulumani joins others in calling on Nersa to reject the application.

Eskom’s justification for their request for this further tariff increase is that it needs additional funding to provide for the purchase of diesel to power their Open Cycle Gas Turbines (OCGT) and to fund their Short Term Power Purchase Programme (STPPP) in order to ‘keep the lights on’. Eskom is also liable for an increased Environmental Levy his year. But Eskom makes this request in a very troubling context of a long history of mismanagement and inefficiency that has resulted in Eskom failing to deliver on its mandate. This has included the excessive remuneration of Eskom executives and consultants; the payment of huge bonuses to Eskom executives; the payment of exorbitant costs for preferential procurement tenders granted for purchases of coal and diesel; and massive cost overruns associated with delays in Eskom’s new build programmes at Medupi and Kusile.

As South Africa marks the 60th Anniversary of the Adoption of the Freedom Charter on 26 June 1955, Khulumani agrees that the electricity production and distribution in the country must comply with the Freedom Charter’s objective of having production systems managed and controlled “to assist the wellbeing of all the people”. The Eskom-created electricity crisis is a strategic opportunity for planning and implementing the transition to a low-carbon economy that offers better futures for all our people.

We demand a public investigation into the systemic issues that underpin Eskom’s crisis. We demand that Nersa reject Eskom’s application in the absence of the transparent disclosure of Eskom’s problems and their causes and the adoption of appropriate remedies. We reject any resort to nuclear power generation. We support the demand for the setting up of a national electricity crisis council, constituted by stakeholders including civil society and trade unions to develop and implement a pro-poor turnaround plan for Eskom which must begin to serve the public interest.

Issued by Khulumani Support Group: Contact details for Khulumani National Director, Tel: 011 833 2044; Cell: 082 268 0223

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