The Commission for Gender Equality (CGE) notes with great regret National Energy Regulator of South Africa’s decision to grant Eskom tariffs hike. This comes after the not so distant hikes of 31 percent in 2009, more so other municipalities deemed it then necessary to hike the tariffs by 34 percent as it was in Eskom’s submission contrary to Nersa’s decision.
All these goes to show how Nersa has failed to live up its mandate, namely that of regulating Eskom and other licensees. Suffice to say that consumers will bear the brunt of such astronomical figures.
Despite Nersa’s assurance that it did consider all the written and oral submissions during the public hearings the opposite seems to be true. Almost all the oral submissions, if none from civil society organisations, labour, independent power producers were dead against a hike of any kind.
A minority were worried about inflation related aspects; however, on the whole they too, were against Nersa granting Eskom’s wishes. It might have been not 35 percent as per Eskom’s submission but the decision is a drawback for the gains that the poorest of the poor have won. It will be practically impossible for them to access electricity as they cannot afford it.
Nersa’s decision will have dire consequences in particular for women whom are in majority in the country. As people we cannot begin to pride ourselves as a liberated country as long as issues pertaining to empowerment of women are not fully addressed and such decisions as this makes it difficult to achieve such a goal.
South Africa is a signatory of various protocols and conventions and one such are the millennium development goals which seek to address issues such as health, electricity, poverty etc. It is apparent the South Africa as a member state cannot fulfil this obligation as Nersa failed to play its part over the years.
Lack of planning on Eskom and Nersa’s part cannot add to the misery of the poor whom have been in distress, and will experience worse distress due to the latest hikes. Eskom is violating various environmental regulations and will add to South Africa not adhering to carbon emissions targets set out the World Conference on Climate Change recently held in Copenhagen.
The Commission for Gender Equality feels that the Constitution obliges Nersa to regulate electricity in the national interest. This would include then Eskom’s duty to deliver electricity in a way that upholds the Constitution. This would include Constitutional provisions on socio-economic rights as well as the provisions protecting the environment. By granting a tariff increase for further investments in coal mining, Nersa would have failed in its duty to regulate Eskom in such a way that the Constitution is upheld.
The Promotion of Administrative Justice Act (PAJA) states that administrative action must be lawful, reasonable, transparent and reasonable fair. Eskom has failed to take into account the availability of grants and soft loans for renewable energy, despite the fact that the Commission for Gender Equality in its submission said that no tariff increase should be granted until Eskom provides all relevant information.
In other words, a steep tariff hike can be only necessary if Eskom insists on expanding coal powered electricity, yet this was not pointed out in Eskom’s submission nor taken into account by Nersa. As early as November, it was clear and a matter of public knowledge that a sum of R3,67 billion in soft loans from the World Bank through the Departments of Water and Environmental Affairs would be made available for renewable energy investment, and that much of this money had in fact already been set aside for Eskom.
But Eskom did not disclose this knowledge in its cost calculations when applying for a tariff increase. Also, Nersa did not go back to Eskom and say they must include this information in their application. It is therefore apparent that Nersa has contravened the PAJA and failed in its legal duty to regulate Eskom properly.
Any decision by Nersa to grant Eskom hikes above inflation rates contravene various statutes of our laws including the very same Constitution. It was also striking to note the great disparity in terms of submissions based on gender relations. It is against this backdrop that we feel the hike was unfortunate and women will continue to suffer as long as the only means toward their empowerment is being taken away from them in terms of affordability.
Issued by: Commission for Gender Equality
24 February 2010
