NUMSA commemorates the 100 year anniversary of the Russian Revolution

Civil Society statement on Electricity Crisis

1 June 2015, Posted in Press Releases

Introduction:  

South Africa is in the midst of a far-reaching electricity crisis; a crisis that worsens with each day that passes. The crisis is multipronged. It is a supply crisis and chronic load-shedding; a financial meltdown of Eskom; massive cost and time overruns in the build programme of new power plants such Medupi and Kusile; worsening governance practices amongst Eskom’s senior management; the downgrading of Eskom within capital markets; a ballooning debt for the utility as municipalities fail to pay their bills to Eskom; threats by Eskom to cut off approximately 10 municipalities; and threats of increased electricity tariffs of up to 25% within the next few months.

Of course, all of this is and will hit hardest the working class and the poor – employed & unemployed and urban & rural.  The “War Room”, which has been set up under the Deputy-President Cyril Ramaphosa in order to solve these problems, does not include trade unions or any other civil society organisations.

It is made of government representatives from Department of Public Enterprises (DPE), Department of Energy (DoE), National Treasury and representatives from Business Unity South Africa (BUSA). The working class have been shut off from raising their voices on the electricity crisis. There is definitely a need to set an alternative worker and community agenda on how to sort out the electricity mess.

Unless such an alternative view is expressed and acted upon, the consequences will be dire. The country will rapidly drift into electricity darkness, load-shedding will be our daily bread and those who have always wanted to see Eskom broken up and privatised will be emboldened.

The crisis may also provide space for what up to now, we have described as false solutions such as the introduction nuclear energy on a huge scale, ‘fracking”, agrofuels/ biofuels, carbon trading, “clean coal” and carbon sequestration.

In response to the exclusive War Rooms, we should set up the Peace Rooms, to research, plan and struggle for a working class solution to the crisis. It must advance solutions that assist the country in achieving energy justice, energy sovereignty, socially owned renewable energy and universal access. 

A call for civil society to act together!
Since the beginning of the year, a number of trade unions and other civil society organisations such as the National Union of Metalworkers of SA (Numsa), Solidarity, United Association of South Africa (UASA) and the Independent Municipal and Allied Trade Union (Imatu), Soweto Electricity Crisis Committee (SECC), Lesedi Community Forum, Mining Affected Communities United in Action (MACUA), Rural Women’s Movement, Unemployed People’s Movement, Rural People’s Movement and the United Front (UF) which is a non-partisan coalition of trade unions and community organisations; have been talking about launching a campaign on how to deal with the electricity crisis that faces us.

In the discussions, the campaign was broken into three phases:

  • Phase 1: A consultative workshop aimed at looking at the root causes of the electricity crisis. Such a workshop was held in Cape Town on 26-27 March 2015.
  • Phase 2: A profiling of struggles around electricity, whether these are in workplaces or in communities; whether on working conditions or issues of distribution or pricing. The main aim of this phase was to expose how the burden of the electricity crisis is falling on the working class, the poor and other middle strata in society.We also felt that it was important to expose how the super-rich assisted sometimes by municipalities where cushioning themselves from the crisis through use of renewable technologies and other measures.  The highlight of this phase was a well attended candle-light night vigil on Wednesday 20th May in Ipelegeng Community Centre in White City, Jabavu; under the theme: Imagine a Winter with Loadshedding.
  • Phase 3: A National Civil Society Conference on the Electricity Crisis. This is scheduled for Tues 02 – Frid 05 June 2015 at Booysens Hotel and Conference Centre, 33 Booysens Road, Johannesburg, 2091.
  • Phase 4: A full-blown campaign on the crisis including protests, litigation, lobbying different stakeholders. This will be based on the need for the working class and communities to strengthen our ability to impose our interests in long-term energy planning in South Africa.

A National Civil Society Conference on the Electricity Crisis:

The objective of the National Civil Society Conference on Electricity is for all those voices that have been excluded from the Eskom “War Room” to develop short and medium term responses to the loadshedding and electricity crisis.

Other aims of the conference are:

  • to educate ourselves about the electricity crisis.
  • to develop proposals for immediate and medium term interventions.
  • getting to know each other’s struggles in order to build alliances and synergies between different organisations, already waging electricity-related struggles.
  • to develop strategic campaigns that can unite a broad social force on a national scale, around winnable demands that will resonate with a broad number of people.
  • to unite and strengthen existing struggles from different organisations and communities, and stimulating new ones where they do not currently exist.
  • to develop regional structures to support these different struggles.
  • to build up from below a broad-based and inclusive organized social force, based on people’s power and workers’ power, to struggle for a working class agenda around electricity. 

Participants at the national conference: 

  • The main targets for the conference are workers and communities affected by electricity.

This includes:

    • Workers in the power sector, or the energy intensive electricity consuming industries. This will include different unions who organise in Eskom.
    • Communities struggling around electricity, in relation to loadshedding, or high prices, or poor quality of service such as unsafe cables, struggles around metering and disconnections, etc. Demarcation struggles are also related to service provision.
    • Communities in municipalities where higher than average price rises are anticipated, either those already struggling or where there is potential for struggles to arise.
  • NGOs working on related issues, including electricity, energy, environment, and land.
  • Technical experts on pricing, or on renewables policy.  Their role will be to support and provide information and analysis.
  • People working on alternatives, mainly around renewable energy.
  • The environmental sector more broadly.
  • Internationals from countries with relevant lessons

Although not part of the conference, Eskom officials, a rep from the National Energy regulator, officials from the Department of Public Enterprises (DPE), South African Local Government Association (SALGA) and others will be invited.

Themes of conference:

  • Should we fight to save Eskom? If so, can we? Given the severity, and worsening nature, of the supply crisis, the financial crisis, and the managerial crisis that Eskom finds itself in, this question is a realistic starting point. It is urgent to think of ways to refinance and recapitalise Eskom, as well as stopping the corruption. It is unclear how deep the hole in Eskom is at the moment.
  • Do we fight for a new publicly-owned and democratically owned electricity utility in renewables that will compete with Eskom? Some people at the preparatory workshop felt it may be necessary to create a new utility, and that South Africa is already too reliant on one company. They felt that it is important to avoid looking at Eskom in isolation from the rest of the economy and to assume that Eskom itself will provide all the answers. A new socially owned renewable energy utility would create the conditions for household, enterprise and community based renewable energy to take root.
  • Loadshedding: How should the load shedding crisis be understood? Is load shedding necessary, or is it possible to avoid it? If so, how? If it is unavoidable, how should it be managed in the short term, and how should the crisis be solved it in the medium term? Who benefits and who loses? These are all class questions.  As such, there is a political struggle over who is load shedded, how, why, when, and how is this chosen.  Issues of transparency, strong regulation and “democratic load shedding” are important, in order to avoid a free-for- all in which the working class suffer. The way load shedding is currently being implemented clearly shows the need for democratic planning in the electricity sector.
  • Electricity pricing: Struggles are erupting over this issue throughout the country, including in rural areas, in response to incredible price rises in recent years. However, it has been hard to unite the struggles nationally. In 2013, Numsa campaigned against an average annual 16% rise through the Multi-Year Price Determination 3 (MYPD3), and reduced the price rise to an 8% average. However, using the “claw back” aspects in the Electricity Pricing Policy (EPP) formula, Eskom has gone to the National Energy Regulator of South Africa (Nersa) to claim that it has taken more to produce electricity.Eskom is now getting more than 8% average. The seriousness about the approach that Eskom uses to “claw back” what it calls “cost reflective tariffs” is that for these claims the utility is not subjected to public hearings. We also, know that municipalities can increase their prices every year; with 01 July is the implementation of these increases.

    There are already municipalities that have indicated that they intend asking more than the average municipal tariff. It is likely that struggles will emerge, or at least there is potential for struggle in municipalities that are asking for a price rise above the average. Moreover, rising electricity prices also mean that the costs of food, and other costs of living will also go up.

    A key question that the conference will address is whether there is a need for a flat, nationally harmonized, rate for electricity throughout the whole country, and if so, what should it be and how to bring it about?

    How to fight against claw back price rises?  Given that the unit cost of electricity generated from renewable energy sources electricity per kWh is actually becoming cheaper than a coal based KWh, can  transitioning towards  renewable energy  bring down the cost of electricity for working class households and communities?

  • Free Basic Electricity (FBE). A big concern is the fragmented nature of the FBE, which is 50KWh in some places and 100 KWh in others. Actually, to increase FBE to 200 KWh would not require much extra electricity, just 17% of Medupi’s capacity. This can become a big issue in the run up to the 2016 local elections.  How will it be possible for FBE to urgently be increased to 200kWh?What possibilities may exist for making FBE go further than it currently goes, through substantially reducing household electricity demand through a massive, rapid, and high quality, roll-out of Solar Water Heaters in working class and poor communities?
  • Alternatives to/resisting privatization. How to Approach the Financial Crisis in Eskom? Eskom’s debt is unprecedented. What are the cost drivers to the Eskom crisis? How does the cost of primary energy (coal and water) contribute to the woes of Eskom? Will the declaration of coal as a strategic mineral help with the financial situation of Eskom?  Where is the money going to come from? We have to have a position on what is the alternative to tariff increases.The financial crisis is a key issue and we cannot tackle this question apart from the wider macroeconomic situation in SA, which is characterised by deep austerity budgeting. The state is not about to rescue Eskom. Eskom used to have a compulsory reserve fund (of electricity), where surplus went into it. Also it used to have a capital reserve fund. We need to think about building these up again. We have to aim high, not modestly. We cannot limit our demands to demands about prices.
  • Democratisation of Eskom. With Eskom having been corporatised what proposals do we advance for democratisation and democratic control over Eskom? Is there a potential for the ownership of Eskom to be transferred to the municipalities, with them becoming shareholders in it?
  • Municipalities: Another related issue is the fragmented nature of electricity distribution with some customers being supplied by Eskom and others by their municipalities. This fragmented nature impacts on the price of electricity and on communities. Many UF affiliates are struggling around this.  There is a need to create a unified distribution system locally. Municipalities need to lead by example.It will be important to explore what potential exists for Municipalities to become producers of electricity and not just distributors. However, for any positive solutions to come from local government, it will be vital to discuss and find ways to solve the worsening financial crisis of the municipalities.
  • New Build Electricity Infrastructure: It is possible to bring both gas and renewable energy infrastructure online much faster than coal and nuclear energy, within just three years. Larger infrastructure takes more time to build, and often overrun the estimated time needed to bring them online. On the other hand, it is possible to exert greater control and rights over small projects and push them through much quicker, especially in the short term.It is necessary to identify short, medium and longer-term priorities for interventions aimed at both managing and solving the crisis. However, the technical solutions related to new build generation capacity cannot be separated out from either the political question of who owns, controls and benefits from the new build, as well as what its impact on climate change is.

    Our guiding principle is rooted in the need for a rapid expansion of renewable energy based as much as possible on different forms of social ownership, and in promoting policies that encourage this, rather than hinder it. It will be important to massively strengthen the social, political and economic forces behind such a slogan, into order to make it a far more realistic proposition than it currently is.

Judicial Enquiry: The Eskom crisis affects the whole country, so needs a full Judicial Enquiry with powers to subpoena people and force them to appear. Something based on voluntary appearances only is not strong enough. The present enquiry has no legal impact, so is useless.

There has been a 3 month stalemate and the Interim Eskom Team are not equipped to make the key decisions it needs to make. Furthermore, the official Enquiry that has been established has recently been contracted to the Canadian legal firm Dentons, a firm that specialises in advising African governments on how to privatize public utility companies.

There will be many in Eskom, the DOE and the Presidency who will oppose the demand for a full Judicial Enquiry, due to what it risks exposing. However, it is a demand we should make. There are a number of key issues that such an Enquiry could deal with, including:  mismanagement and corruption, and cost and time overruns for Medupi and Kusile. Holding an Enquiry will allow us to have a deep discussion about the Eskom crisis and maybe broader discussion in society about energy needs in the face of the climate crisis. It is a demand that can unite a broad range of people around, even if government does not give in to it.

It will not only unite people from trade unions and social movements, but also parts of society, government, and even capital who are also deeply concerned about the crisis, and who can be brought around. A key question to address is how to make the Judicial Enquiry forceful enough so that it would actual be useful. Who will be the participants in the enquiry, and what powers will it have to subpoena? What will be its terms of reference?

All of these urgent questions relating to the South Africa’s electricity crisis starkly raise the wider question of South Africa’s energy future, and whether or not it is desirable to continue with the Mineral-Energy-Finance Complex being at the heart of the country’s development model, or whether this model needs to be dismantled. Although not the main focus of the conference, these wider questions, and the question of South Africa’s energy mix (coal, nuclear, renewable energy, shale gas…etc.) and the implications for climate change, will also be touched on, at least briefly, throughout the course of the conference.

The conference needs to address the question as to what should the electricity sector look like in 10- years time and how to plan now for this? If we do not urgently address this question now, it will already be too late. There is a need for planning from below. Local government can play a key role in helping to decentralize the electricity system. A local and national transition to a renewable energy driven system that benefits the working class and the poor will not happen automatically. It requires working class and community organizations to struggle to impose their interests at the centre of long term energy planning in South Africa.

Another important thing that we will have to do is the mapping of both the impacts on load shedding for different classes, sectors and geographical locations, as well as the mapping of where electricity related struggles are occurring. It will be important to develop solutions that avoid conflict within the working class, especially between communities struggling over electricity pricing, metering and disconnections, and Eskom workers themselves. We aim to build a worker-community alliance that is made up of, and able to speak to, victims of pollution, to people with little or no access to electricity, to communities who are not currently heard.

Key Speakers and Organizations at the Conference

Key speakers will include: representatives from the following trade unions and civil society organizations: Irvin Jim, General Secretary of the National Union of Metalworkers of South Africa (Numsa); Dirk Hermann, Chief Executive of Solidarity, Brian Muir from the United Association of South Africa (UASA) and Anja Mueller Deibicht, Researcher from the Independent Municipal and Allied Trade Union (Imatu), Faith Vangqa from the Orlando West Task Team, as well as representatives from the Soweto Electricity Crisis Committee, WWF, and Greencape. There will also be a range of energy experts including Chris Yelland, Ted Blom and Daniel Chavez from the Netherlands-based TransNational Institute.

The conference will also be addressed by senior representatives from Eskom, Thembela Bukula from the National Energy Regulator of South Africa (NERSA), as well as representatives from the South African Chamber of Commerce and Industry (SACCI), Department of Public Enterprises (DPE) and the South African Local Government Association (SALGA).

Other participants include a wide range of civil society organizations and academics, including: Mining Affected Communities United in Action (MACUA), Women Affected by Mining United in Action (WAMUA), Earthlife, Alternative Information Development Centre (AIDC), South Durban Environment Community Alliance, Women in Mining in Africa, South Africa Food Sovereignty Campaign, Vaal Environmental Justice Alliance, Lesedi Development Forum, 350.org and various local United Front groups.

Enquiries:
Castro Ngobese, Numsa National Spokesperson, 083 627 5197