Trade unions oppose Eskom tariff hike

TRADE unions have expressed their dissatisfaction with the National Energy Regulator of South Africa (Nersa)’s Eskom tariff increase of 32%.

The unions said the increase would devastate the budgets of poor and working people.

Last week Nersa approved an electricity tariff increase to Eskom, granting an 18.65% increase for the 2023/24 determination period, and 12.5% for 2024/25.

This is while South Africa is still on Stage 6 load shedding until further notice.

SA Federation of Trade Unions (Saftu) secretary-general Zwelinzima Vavi said Eskom had been badly managed and regulated and that giving it more money without full transformation is a recipe for disaster.

Vavi said Eskom has blown more than R700 billion on capital expenditure since 2007 but produces 25% less electricity today than then.

“The money has gone mainly to pay for the corrupt Medupi and Kusile coal-fired power plants, for which Eskom owes most of the R400 billion in its liabilities, and to lenders (like the World Bank and Western governments’ import-export banks) which should be cancelling it on the grounds that it is odious debt,” said Vavi.

The latest tariff increase should be looked at from a long-term perspective, he said. Combined with increases in the past 15 years, he said the electricity tariff is more than 800% higher than in 2007. Hence electricity has become unaffordable for poor and working-class people.

“We are especially angry that it is South African women, who mainly take care of our homes, cooking and child-rearing, who must resort to supplementing electricity with firewood, coal, paraffin and gas stoves and heaters. Alternatives to electricity may be cheaper in the short-term but they create indoor air pollution, which is much costlier to health in the medium-term,” he said.

Paying for food and electricity now costs way more than the national minimum wage, earned by about half of the workforce in the country, Vavi said.

Workers’ wages were being suppressed across the economy, consequently, even the wages of those earning above the national minimum wage were losing their buying power, he added. This means any increase in the costs of electricity and food, fuel, transport, hygiene products, etc, is making the living conditions of ordinary workers worse and unaffordable, Vavi said.

“Even for so-called middle-income earners, 80% of their salaries are depleted within five days of receiving the income due to the rising cost of living,” Vavi said.

The Public Servants Association (PSA) called for urgent presidential intervention regarding the increase and demanded that Nersa should not even consider such a ludicrous request by Eskom.

The PSA said it also believed that the proposed increase would not remedy the situation and would only provide more opportunities for looting of funds if maladministration was not addressed.

“Public servants are also under severe financial stress under the current economic climate in the absence of salary increases for the past three years. The PSA therefore proposes that if any electricity price increase must be considered, it should be based on the average wage increase granted to the country’s workers,” said the PSA.

Cosatu national spokesperson Sizwe Pamla said the tariff increase was “insensitive and careless”.

“The continuous above-inflation increases that Eskom has received since 2006 are nothing more than legalised robbery of consumers. These increases only serve to pickpocket workers of their meagre wages, suffocate businesses and deny the economy the chance to reduce unemployment.”

Pamla warned the tariff hikes might even lead to job losses. Employers would realise that there is actually no need to keep some operations and, as a result, there would be job losses, he said.

“If you look at workers across all sectors they are struggling with below-inflation pay increases,” said Pamla.

A lot of workers have been struggling with the price of electricity, he said.

“Workers are not just struggling with the price of petrol but also the price of food. All these problems have suffocated workers,” he said.

Southern African Faith Communities’ Environment Institute executive director Francesca de Gasparis said Eskom’s 18.65% price hike was just another poor decision in a series of poor decision-making from the government.

“Eskom should not be allowed above inflationary increases to consumers, taxed in terms of unreliable, insufficient energy supply and energy costs.”