BUSINESS WANTS ESKOM TO FAIL
The South African Federation of Trade Unions (SAFTU) note with serious concern the Regulatory Clearing Account (RCA) application made by Eskom to claw back R24 billion in historical costs and revenue. Our worry is not the drive to recover some historical costs, but how they will go about recovering such costs. The RCA applications means that they will claw back these costs through tariff increases.
Given the mass impoverishment, and the diminishing buying power of the workers due to high inflation, electricity tariff increases will hurt the ordinary working people and the unemployed negatively. The Household Affordability Index (HAI) by Pietermaritzburg Economic Justice & Dignity (PMBEJD) research group shows that in an average municipality, the cost of 350 kWh of electricity was R960 in July 2023. There was 18,56% increase to electricity prices in April 2023, which we opposed as SAFTU. The April increase added to cumulative increases in the past 15 years amounts to about 800%.
The attempt to claw back historical costs through the tariff structure means that more percentages will be added on top of the future tariff increases, making it even more expensive to procure electricity for the poor. The wage growth has declined in 2022 according to the International Labour Organisation (ILO) wage report. The estimates of few years ago by the World Bank shows that half of the country’s population lives below the upper bound poverty line. These facts attest to the abject poverty in which the working class are living under.
If Eskom is filing RCA, those companies receiving special tariffs must foot the bill. Bottom-line is they should not recover those costs through tariffs tailored for the ordinary consumers who are working class and poor. In addition, Eskom and the law enforcement agencies must deal with all groupings that contribute to wasteful expenditure, as this means more RCA applications in the future.
Hypocrisy of Business
Business organisations such as Business Unity SA and the Energy Intensive Users Group (EIUG) have come out to also oppose the RCA application, on grounds that this is Eskom’s self-inflicted inadequacies.
However, there is sheer hypocrisy on the part of Business, especially if we consider that it is EIUG and BUSA that is also complaining. Some among the EIUG are subjected to special electricity tariffs at extremely lower rates. By extension, these companies which are party to special tariffs are being subsidised by the rest of us.
Besides the inadequacies that truly exist in Eskom, given its protracted bungling on the part of management and governance, the special tariff agreements means that Eskom is selling electricity to these companies at below costs of production. That their organisational representatives in the form of BUSA and IEUG complain when Eskom wants to recoup some historical costs is plain hypocrisy.
Government investment in Eskom
To help Eskom have adequate amount to meet its spending obligations for operations and fixing the fleet and expanding the grid, the government must invest in Eskom. This will help country avoid the situation where Eskom attempts to recoup historical costs through tariffs, which are basically costs passed on to ordinary consumers such as households and small traders.
It is important to note that the business organisations that are opposed to the RCA, may be doing so to have Eskom be in a perpetual state of negative equity, which is used as a further pretext to chuck it out of generation and pursue further privatisation of the energy generation.
SAFTU is opposed to the privatisation of energy generation, and denounce any pretexts to further such intentions. It is not a taboo for government to invest in its state corporations, as the bourgeois commentators in the media have come to make the public believe. Government must launch massive investments in Eskom to retain its dominance in energy generation, transmission and distribution.