Durban - South African consumers are fed up with corruption at Eskom and it was “ludicrous” to expect them to bail out the utility by expecting them to pay increased tariffs for already overpriced electricity.
Business leaders, community representatives and environmental activists were unanimous in their rage, lambasting the cash-strapped power utility for corruption and mismanagement at a National Energy Regulator of SA (Nersa) public hearing in Durban on Thursday.
The public hearings for Eskom’s Regulatory Clearing Account (RCA) application for the 2018/19 financial year are being held around the country.
Eskom general manager Hasha
Tlhotlhalemaje provided an overview of the parastatal’s financial standing, giving reasons why it wanted to recover revenue of R27.24billion for the 2018/2019 financial year, during which it was allowed a 5.23% tariff hike. She said the decision had left Eskom with a funding shortfall.
“The RCA is meant to ensure Eskom can recover its full efficient costs as the actual realities have occurred differently than assumed during the revenue
decision,” Tlhotlhalemaje said.
Graphic: Timothy Alexander (African News Agency)
Vector: Freepik.com
She said Eskom had not achieved the level of sales volumes assumed by Nersa for the period and the balance should be recovered “as soon as possible”.
Pietermaritzburg and Midlands Chamber of Commerce chief executive Melanie Veness said Eskom had over- recovered revenue from consumers to the tune of a more than 300% increase in tariffs over the past 10 years and if anything, prices should be deflating.
She said the private sector could not afford to fund “inefficiency, maladministration and corruption”, warning that price hikes would lead to job losses.
“Seeking to recover the results of mismanagement from consumers is ludicrous, and making consumers pay even more is just reinforcing the negative, unsustainable cycle for Eskom. It’s completely irrational. Increasing electricity pricing is not prudent and it’s not sustainable,” Veness said.
“If this is permitted then we are knowingly contributing to the destruction of Eskom and our economy and negatively affecting the lives of every South African now and in the future,” she said.
Principals Forum representative Mac Ramraj said schools and parents were battling.
“For every R1 we collect, 60% goes to electricity. How do we provide for textbooks and all the other resources for the benefit of students?” Ramraj said.
KwaMakhutha community representative Samuel Ntombela called on Nersa not to grant Eskom funds until it had resolved its problems.
“It’s painful that Eskom has the audacity to come and ask for money from the poor people of South Africa. We don’t have money to buy electricity,” he said.
KwaZulu-Natal consumer Vuyolwethu Mfolozi demanded to know why former Eskom chief executive Brian Molefe received a R30 million golden handshake “for doing nothing”.
He said poor people were tired of being asked to fund Eskom.
“Eskom is like a corruption dance- floor, the corruption is of the highest level. Eskom, go back to your bosses and tell them we are tired of your thieving. Give other companies a chance to do your work so we can get electricity. They have failed and must let other people take charge. Why don’t you cut the bonuses?”
He warned Nersa that “we are going to take electricity, and they will call people thieves and hooligans. We end up taking electricity illegally because we don’t have money”.
Durban South Environmental Community Alliance co-ordinator Desmond D’ Sa said Eskom was in “crisis”.
“Nothing must be given to Eskom. They are coming here to take Nersa to court with our money and we must say no,” D’Sa said.
GroundWork researcher David Hallowes said consumers were sinking into debt to pay for electricity and to buy food.
“The eThekwini rate is R1.70 per kWh, according to my latest electricity bill and assuming the municipality keeps its rate the same, we will be paying R2.30 per kWh in 2021/22,” he said.
Eskom initially asked Nersa for a 16.6% annual tariff increase until 20/21 but the regulator granted an 8.1% hike for 2020 and a 5.2% hike for 2021.
Eskom is challenging this decision along with Nersa’s RCA rulings for 2015, 2016 and 2017 as well as its multi-year price determination for 2020/21/22 in the North Gauteng High Court.
Energy expert Ted Blom said that if the utility won in court this would translate into a 53% price hike for consumers in addition to an estimated extra 14% increase if Nersa granted its RCA request.