NUM is opposed to the changes of the Electricity Regulation Act (ERA)

Media Statement, 19 March 2024

The National Union of Mineworkers (NUM) stands opposed to the changes in the Electricity Regulation Act (ERA). This is a way to destroy Eskom and hand it over to the private companies the same way SAA and Transnet were destroyed.

The unbundling of Eskom into three separate entities will result in increased tariffs, thereby making Electricity more unaffordable to the most disadvantaged and poor people. It will exacerbate energy poverty for many of our poor communities.

This is a way to undermine energy democracy. The NUM made a sound submission to the portfolio committee against changes to the ERA. Our submissions were not taken into consideration. These changes are an insult to the poor and the marginalized.

The changes in ERA are a step towards the privatization of Eskom. The unbundling of state utilities has failed in many countries. It has created chaos in the energy sector resulting in higher tariffs.

The unbundling is presented to us as a silver bullet for all our problems. We are told that the unbundling will prevent corruption and state capture. As the NUM we view unbundling as an enabler for state capture and corruption. It is a precursor for the privatization of our state-owned utility.

Eskom is facing 5 major problems which are:

• The drop in electricity sales,
• The unaffordable price of primary energy,
• The cost of the Power Purchase Agreements (PPAs),
• Poor methods of collecting revenue
• Serving of debts.

The unbundling will not be able to solve any of these problems. It is a neoliberal ideological pseudo solution provided to us by politicians who are clueless about science and engineering. Politicians must give space to scientists and engineers to come up with engineering and scientific solutions to solve Eskom's problems.

The Eskom assessment report conducted by VGBE contains most of the issues that we have been raising as some of the challenges that are facing the electricity sector. The report also confirms that the challenges of Eskom are caused mainly by poor management and governance. The report has noted that the biggest problem of Eskom is the generation division. The transmission division is doing well, although it also raises concerns about the age of the network. Transmission is not the cause of the load-shedding. The cause of load shedding is the poor performance of the generation of power plants. This is not new as it is the song, we have been singing all along.

All these changes are happening without proper consultation. The NUM has referred a case to Tokiso disputing the unbundling process. There is a serious lack of consultation by both the state as a shareholder and Eskom as the employer. Our members are in the dark about their future. The Labour Relation Act (LRA) prescribe that companies must follow a proper consultation process before restructuring. In this case, this section of the LRA is ignored. It is surprising that while we are waiting for the third party to assist parties to get back to a consultation table, the state is marking serious changes.

For more detailed information, please contact:

Khangela Baloyi, NUM Energy Sector Coordinator, 072 450 6251