EDITORIAL: Eskom’s addiction: just say ‘no’

If you were angry with Eskom before, just wait: the chutzpah shown in demanding an extra 17% hike to your electricity tariff, to cover R27bn in losses caused by load-shedding, is remarkable. There is something abusive in that, like the lout who claims medical costs for the damage done to his fist after roughing up someone in a bar fight.

Last week, the National Energy Regulator of SA (Nersa) published Eskom’s application on its website, in which it asks for the extra money, partly because "the revenue impact of load-shedding" was not included in its original tariff application. In other words, it lost out on R762m it couldn’t bill during the year to March 2018, because of the 418 hours you had to endure without electricity that year.

That’s insulting enough. But perhaps the most egregious part is that Eskom also wants extra cash to pay "employee benefits" to thousands of staff who, experts agree, it doesn’t even need. For example, a 2016 World Bank study concluded that Eskom was 66% overstaffed. Others put the proportion lower, but whichever way you slice it, taxpayers are paying too much for Eskom’s regime of sheltered employment.

In its application, the utility has asked for an extra R3.2bn in "employee benefits", above the R24.3bn that Nersa allowed it last time. Nersa had reasoned that this would pay 32,954 staff — not the 39,292 people Eskom employed.

As Eskom puts it: "This required Eskom to reduce its number of employees by 6,323."

But of course, Eskom didn’t do this. The government doesn’t have the stomach to confront the trade unions to address this issue. So instead, it wants to dip into your wallet.

The bottom line is that South Africans, already being milked by Eskom while suffering frequent periods where they don’t get the service they’re paying for, must tighten their belts to pay more, even if Eskom can’t be bothered to do the same.

Of course, it’s not as if Nersa is unaware of Eskom’s bloated staff complement. Back in 2017, the regulator conducted its own benchmarking analysis and the results were predictably dismal: Eskom has been consistently using more staff to produce less electricity since it first shocked the nation with a spate of rolling blackouts in 2008.

Commendably, Nersa has held the line so far, arguing that staff bonuses, leave payouts and "chairman’s awards" are all "within management control and could have been managed so that they do not increase significantly".

It’s imperative that Nersa, chaired by former Johnnic Holdings CEO Jacob Modise, continues to approach Eskom’s arguments sceptically.

So what will that extra R27.2bn, split over two years, mean for Eskom’s paying customers? As energy expert Ted Blom puts it: "As the increase is over and above their annual tariff hikes, in reality, your electricity costs will double."

On Blom’s website, 41,229 people have commented on Eskom’s application — and you can imagine which way the sentiment goes. As one person put it, "it’s criminal that consumers are forced to pay for Eskom’s disasters".

So, before the regulator considers granting an extra dime to Eskom, it should insist that the utility takes some hard decisions about staff. The public shouldn’t be forced to pay for the government’s inability to confront the unions. And it should also insist that Eskom recoup the R36.5bn owed to it by municipalities.

In the absence of setting hard conditions, it’s like giving a gambling addict someone else’s credit card and an Uber to the nearby casino.

Public comments must be in by January 20 and public hearings will take place from February 3 to 21. Now is the time to step up.