Soweto residents to take Eskom to court

Written by Ciaran Ryan. Posted in Journalism

To prevent township from ‘sliding further into lawlessness’ over electricity disconnections. From Moneyweb.

‘Meaningful engagement’ between the parties with a view to drawing up a binding policy framework that reduces power disconnections is proposed. Image: Waldo Swiegers, Bloomberg

‘Meaningful engagement’ between the parties with a view to drawing up a binding policy framework that reduces power disconnections is proposed. Image: Waldo Swiegers, Bloomberg

Several hundred Soweto residents, led by the Lungelo Lethu Human Rights Foundation (LLHRF), are planning to haul Eskom before the South Gauteng High Court to stop the electricity utility carrying out what they say are arbitrary and discriminatory electricity disconnections.

LLHRF intends asking the court to compel Eskom to set up a fair and independent tribunal to adjudicate the complaints. Summons will be served on Eskom in the coming weeks.

Eskom’s annual report says it is owned R18 billion in unpaid electricity bills in Soweto alone, out of a total arrears bill of about R40 billion.

In the last few days President Cyril Ramaphosa issued a public letter calling for an end to the culture of non-payment that worked so well in bringing an end to apartheid, but “has no place in present-day SA. If public utilities like Eskom are to survive, then all users need to pay for the services they receive.”

Speaking at the recent Joburg Mining Indaba, Eskom acting CEO Jabu Mabuza also called for an end to the culture of non-payment that had contributed to Eskom’s dire financial situation.

By some estimates, just 10% of residents are paying for electricity in Soweto.

The notion that Soweto residents are wilfully delinquent is challenged by LLHRF president King Sibiya. “Our main objective in bringing this court action is to stop Soweto sinking deeper into lawlessness. Social protests are escalating and recently this resulted in the tragic death of two workers. We have held numerous forums in Soweto and have heard complaints from residents that Eskom is disconnecting residents without just cause.

Paying customers also affected

“Some residents who are dutifully paying their electricity bills have been disconnected, and others who are entitled to free or subsidised electricity are also being disconnected.

“Our request to the court is very simple: establish a tribunal to hear the individual merits of each complaint before deciding to disconnect power from people who are often living in desperate circumstances.”

Soweto is supplied with electricity directly by Eskom, and not City Power, which supplies most of Johannesburg. City Power has established channels for resolving customer complaints, largely due to various high court decisions in recent years. However Eskom is not subject to the same legal requirements and is therefore able to act with impunity when deciding to disconnect customers, says Sibiya.

He adds that Eskom’s claim that Soweto residents are R18 billion in arrears requires a proper audit.

“Based on our interactions with community organisations in Soweto, we believe this figure may be exaggerated,” says Sibiya. “We are not asking for any freebies for Soweto residents. We support President Ramaphosa’s call for an end to lawlessness and the culture of non-payment. But we want fairness and transparency in the way Eskom treats its customers in the area.”

The Soweto Accord

LLHRF says an agreement was reached in 1992 between Eskom and Soweto residents. The so-called Soweto Accord outlined an 11-point plan whereby Eskom would directly provide the township with electricity, thereby avoiding having to pay local government mark-up fees. The purpose of accord was to bring an end to the rent boycott prevailing at the time and restore a culture of payment within townships. That clearly hasn’t worked.

Sibiya says he decided to get involved when he saw service protests in the township and the destruction of Eskom property and assets. “If we don’t do something about this, the service protests will get worse.”

Some of the key points of the Soweto Accord were:

  1. Residents of Soweto were to receive electricity direct from Eskom with a flat rate of R33.80 per month per household. This flat rate was to be paid until Eskom repaired all meter boxes in Soweto. This was supposed to end the practice of Eskom billing customers based on estimations (a practice that continues til today). Residents complain that they are not being accurately billed for services.
  2. Eskom was to embark on a consumer education programme to explain to customers how billing worked and to assist them in reading their meters. The intention was to assist residents in saving electricity.
  3. Eskom, together with civic associations, would embark on educational roadshows. This did not happen, says the LLHRF.
  4. Eskom would repair all transformers to assist it in reaching its targets in terms of budget and service delivery. The resultant improvement in service delivery was considered a key component of the campaign to restore a culture of payment in the township. This, too, did not roll out as planned.
  5. Poor households were to be extended “a duty of care”, meaning government would subsidise those who can’t afford to pay for services they consumed. Today, Eskom is claiming payment from these same poor people (and the municipality), to the tune of R18 billion.

Soweto’s disputed R18 billion debt to Eskom

“We are willing and prepared to pay electricity tariffs at affordable rates, taking into consideration the fact that unemployment and poverty are at extremely high levels in the township,” says Sibiya.

“Eskom’s unilateral approach to disconnections and billing is unjustified, unreasonable and inequitable. Water and electricity are fundamental human rights as stipulated in the United Nations Universal Declaration.”

LLHRF says the solution is for both sides to engage meaningfully with a view to drawing up a binding policy framework. A flat electricity rate can be agreed as an interim solution. The interim solution depends on the negotiations by both parties.    

“We are also sympathetic to Eskom’s predicament,” says Sibiya.

“There is a debt outstanding. But the chances of recovering this are very low indeed so long as we have antagonism between Eskom and the people of Soweto.

“Criminality is spreading in the township through cable theft and destruction of Eskom’s property. This makes it difficult for Eskom to deliver on its mandate and to achieve its budget. We want to assist them to restore services in the township and bring an end to criminality. This will require the cooperation of law enforcement agencies, community forums and Eskom.

Electricity prices have been escalating at more than 18% a year in recent years. On the current pricing trajectory, expenditure by households will almost double by 2030. This is unsustainable in one of the poorest parts of the country.

Background to the dispute

LLHRF says at the start of winter this year Eskom disconnected electricity to hundreds of Soweto households, schools, churches, business without any notice. The disconnected included people who paying their monthly bills. This was a punitive and blanket response by Eskom to criminals who had stolen cables and destroyed Eskom property.

Soweto has a long history of disputes with Eskom, dating back to the apartheid years.

In the early 1990s, many residents joined the Operation Khanyisa campaign which encouraged the illegal reconnection of electricity.

The campaign justified illegal reconnections based on long-standing claims of massive and indiscriminate cut-offs, including cutting off entire blocks, thereby penalising those who were paying their bills.

According to a University of Johannesburg PhD study on township service delivery protests by Ndanduleni Nthambeleni, the campaign organisers also claimed incorrect billing, cut-offs without proper notice, unserviced and faulty meters and the lack of concessions for the poor, the disabled and the unemployed.

LLHRF says it approached Eskom on behalf of the community on numerous occasions, and was informed by Eskom management that it cannot reconnect electricity without an audit. “We sent petitions and memoranda to Eskom, to no avail,” says Sibiya.

Eskom is demanding R6 500 for reconnections and 25% of the outstanding debt as an upfront payment.

“This is clearly unaffordable for many elderly people and pensioners now living without power,” says Sibiya. “Many residents also complain of over-billing, but are unable to have their voices heard by Eskom.”

LLHRF says Eskom is in violation of the Soweto Accord as well as the Consumer Protection Act, the Municipal Systems Amendment Act, the Promotion of Administrative Justice Act and the Constitution.

Response from Eskom

All Eskom tariffs are regulated by Nersa (National Energy Regulator of SA) and Eskom abides by those tariffs for each category of customers. Customers will therefore pay the tariffs applicable to their category as with all customers supplied by Eskom throughout the country.

Eskom cannot negotiate separate tariffs or have preferential arrangements outside of what is regulated. A fixed charge per household will result in customers paying a fixed amount irrespective of the amount of electricity used. This could lead to wasteful usage of electricity. Above all, this will cause network overloading and hindrance in providing good service to customers. Eskom’s lifeline tariffs are Homelight 20 A and Homelight 60 A.

The lifeline tariffs are meant to provide a basic electricity service at a subsidised rate to those who cannot afford to pay the full tariff.

The current inclining block tariff (IBT) is provided to all residential customers, and therefore provides a subsidy to all low-consumption residential customers.

Eskom has a yearly customer education schedule for various communities including Soweto. The programme focuses mainly on the safe use of electricity, how to use electricity wisely and efficiently, the IBT, free basic electricity (FBE) and other electricity-related information that is of benefit to customers.

Eskom is not in a position to continuously provide services in areas where the residents are not paying for their electricity. Non-payment of electricity does not only affect the security of supply for paying customers, but it also contributes to increased energy and revenue losses coupled with increased operational costs.

Eskom maintains and replaces failed infrastructure on a regular basis due to overloading caused by illegal connections. This is not sustainable and a PFMA [Public Finance Management Act] issue while not in line with Eskom’s revenue management practice and efforts to improve on its financial and operational objectives.

In order for Eskom to replace the damaged mini-substation and subsequently restore supply to the area, audits have to be conducted on the premises that are connected to the said mini-substation or the transformer. The audits will assist in identifying and eliminating the cause of the failure and damages to electricity equipment. During these audits, illegal connections and tampered meters will be immediately removed, customers who have contraventions will be disconnected and a fine of R6 052.60 will be issued to the customers that bypassed meters.

The government assists all qualifying indigent households by providing free basic electricity. This is a programme facilitated and administered by municipalities. Eskom issues FBE to identified customers on behalf of the government.

Eskom is allowed by law to estimate customer readings. The estimations are based on the customer’s consumption when actual readings are taken. Eskom is also able to correct estimations if a customer is over or underestimated whenever actual readings are taken. Eskom meter readers are in some instances unable to enter customers’ premises due to challenges such as locked gates and dangerous dogs. However, customers are encouraged to send their meter readings to Eskom between the 4th and 7th of each month.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.