MSP Occasional Paper No.4
One of the priorities of the African National Congress (ANC) when it came to power in 1994 was to make electricity accessible and affordable to all South Africans. In some respects the government has been successful in this regard, having connected more than 2.5 million additional homes to the electricity grid with plans for 600,000 more connections by the end of 2002. This push to expand access to electricity has been undermined, however, by its lack of affordability. High per-unit costs for township dwellers – typically 30% higher than white suburban areas and up to 10 times higher than off-peak prices offered to industry – has meant that low-income households are unable to purchase the volume of electricity they need to sustain even the most basic requirements of heating and cooking. Self-imposed reductions of electricity usage, combined with aggressive cutoffs by Eskom for non-payment of bills, has meant that tens of thousands of low-income households are without the electricity they need, with dire consequences for public health and safety and poverty alleviation. This paper provides the first detailed case study of access and affordability to electricity in the township of Soweto, in Johannesburg. Although not necessarily indicative of electricity supply and pricing in the country as a whole, the findings raise some troubling questions about the effects of cost recovery on essential services for the rural and urban poor. The paper makes six key findings. First, most Sowetans are unable to pay their electricity bills. Contrary to the “culture of non-payment” thesis which argues that this trend is a legacy of the boycott era of the 1980s, the large majority of the 200 households surveyed made regular contributions to their electricity bills, kept their electricity bills on file and were well aware of their payment situation. Second, arrears for non-payment were common in Soweto, with 89% of households having some level of electricity debt, up to more than R30,000, and a large proportion of arrears were more than four years old, suggesting a long-term debt trap for many low-income households. Third, this situation has led to a rash of electricity cut-offs in Soweto – up to 20,000 households per month in early 2001, and some households went as long as nine months without power. Another 10% of households have had their electricity cables removed permanently by Eskom for allegedly having reconnected illegally to the electricity grid. The health and safety implications of these cut-offs are serious, especially for women and children, with respondents complaining of spoiled food, increased workloads for women, loss of productivity in small shops, increases in domestic violence and a range of other concerns. Fourth, not surprisingly, Sowetans are singularly unimpressed with Eskom, with two thirds saying that the service is “bad” and 70% saying that it is worse than it was five years ago. Interviewees identified problems with inaccurate, inconsistent and confusing billing, poor customer relations, and lack of notification before disconnections took place as some of the reasons for rating Eskom’s service so poorly. Fifth, with regards to the electoral promises by the ANC of “free electricity,” one of the main criticisms is that the free 50 kW/hr per month offered is less than 10% of average household usage and therefore makes little difference to the overall household electricity bill. There were also complaints that the use of the “household” as a unit of measurement biases against large families. Interestingly, 40% of respondents also suggested that the promise of free electricity (which has not yet been provided in Soweto) was just an election ploy, with some suggesting it was an “outright lie”. Finally, there would appear to be a growing demand in Soweto for a return – at least on a short-term basis – to a flat rate for electricity. Representatives from the Soweto Electricity Crisis Committee have made a case for fixing this fl at rate at R50 per month. Although counter to the general push for volumetric pricing and cost recovery on the part of government, the idea of a flat rate would appear to have strong political support in Soweto and may offer an interim solution to the affordability crisis.