Energy unions pledge solutions to the electricity crisis

Thursday 14 May 2015

Yesterday Wednesday 13 May 2015, four energy unions – the National Union of Metalworkers of South Africa (Numsa), Solidarity, United Association of South Africa (UASA) and the Independent Municipal and Allied Trade Union (Imatu) held an emergency and historic meeting on the far-reaching electricity crisis that worsens with each day that passes.

The four unions which organise at Eskom, as well as in other energy intensive sectors and in the electricity distribution sector met on the day when newspaper and other media headlines reported on proposals emanating from the “war room” charged with coming with solutions to the electricity crisis and chaired by the Deputy President Cyril Ramaphosa (see BDlive report).

Yesterday’s meeting of the four unions also took place on the same day that the National Energy Regulator (Nersa) met to determine Eskom’s application for the reopening of the third Multi-Year Price Determination (MYPD3) that may lead to a 25.3% increase in electricity tariffs for 2015/16.

The first thing that the four unions committed themselves to was to table what they consider as immediate and medium-term solutions to the electricity crisis. The meeting agreed that what faces the electricity sector is a multipronged crisis characterised by electricity supply challenges; chronic load-shedding; a financial meltdown of Eskom; massive cost and time overruns in the build programme; maladministration within Eskom’s senior management; devastating downgrading of Eskom by capital markets; a ballooning debt for the utility as municipalities fail to pay their bills to Eskom; threats by Eskom to cut off about 10 municipalities; and prospects of increased electricity tariffs. The unions agreed that the crisis affects all strata in society, particularly workers and the poor.

The unions were also angered by the fact that the voices of workers and ordinary people have been shut off and excluded from the so-called “war room” that is made up of Eskom management; government ministers and officials; and business sector representatives.

They felt that it was their members who are retrenched or face short-time as a result of load-shedding. They also argued that there is an attempt to shift the burden of incorrect policy choices onto the shoulders of ordinary people and consumers through increased tariffs.

The unions gathered in yesterday’s meeting agreed on two measures:

- To jointly seek a meeting with the Minister of Public Enterprises Lynne Brown as the minister representing Eskom’s shareholder.

- To convene on Tuesday 02 – Friday 05 June 2015 a broad civil society conference on the electricity crisis. The aim of this conference will be explore immediate, short-term and medium-term measures to avert and mitigate what the unions see as the meltdown of the electricity supply industry.

In meanwhile, the unions agreed on the following:

- A call for an independent and preferably a judicial commission of enquiry that will investigate the root causes of the crisis, including the management of the utility’s contracts, apparent mismanagement and corruption within Eskom; cost and time overruns for Medupi and Kusile; and bonuses paid to Eskom directors and executives. We have little faith in the enquiry that the multinational and Canadian –based law firm Dentons is conducting.

- On a set of proposals to curb what are the key cost-drivers in the generation of electricity such as coal and water contracts.

- Measures to ensure public and democratic control over what is supposed to be a state-owned entity but acts in manner that is not different to private companies.

- A joint presentation that the unions will make to Nersa to oppose the 25.3% increase in electricity tariffs that Eskom seeks. The unions will make their written submission to Nersa before the deadline of 15 June 2015 and will en masse be at the public hearings planned for 23-24 June 2015.

- To immediately seek a meeting with Eskom to solicit the criteria in which the load-shedding schedules are determined and to provide alternatives that are not disastrous to our members/communities and that do not allow the rich to contract out of the electricity crisis.

- While the focus of the intervention is on the Eskom crisis, there is a need to deal with the whole electricity industry, both the supply and distribution sides of the sector. Uppermost in this, is the fragmentation in distribution, the differences in tariffs depending on who is the distributor (Eskom or municipality) and the whole issue of refurbishment of the electricity distribution industry (EDI).

- Opposition to Eskom threats to cut-off municipalities regardless of whether consumers are paying to local authorities.

- Immediate discussions on local procurement in electricity and energy build programmes.

- In light of talks within National Treasury and the “war room” about possible sale of power plants and initial public offering of Eskom shares, to resuscitate the National Framework Agreement (NFA) on Restructuring of State Assets agreed with labour in 1995.    

Irvin Jim (Numsa General Secretary)

Gideon du Plessis (Solidarity General Secretary)

Brian Muir (UASA Sector Manager)

Anja Muller-Deibicht (IMATU Research & Policy Analyst)

Issued by NUMSA, May 14 2015