Last year's rolling blackouts are still fresh in the minds of many South Africans.
For weeks at the start of 2008 there was traffic congestion, candles, torches, generators and not much business.
Even deep underground, our gold mines had to close. Eskom's explanation for this was that it had run out of reserve power.
[Carte Blanche January 2008] Dr Steve Lennon (Director of Corporate Services, Eskom: 'Yesterday, we got to the stage where we said the integrity of the national system is at risk. Now the implications of that are severe. The alternative was a national blackout.'
Then suddenly, without explanation, the blackouts came to an end and the power utility announced that it was to embark on a massive expansion programme.
Two huge tariff increases have since come into effect; one of 27 percent and another of 31.3 percent.
This past week details were revealed of yet another three Eskom would like to implement over the next three years; each a massive 45 percent.
There's simply no choice says Eskom's Chief Executive, Jacob Maroga.
Jacob Maroga (Chief Executive: Eskom): 'We know that without power, and if you constrain the availability of power, you are creating a limit on the growth of the economy.'
He asked South Africans to support Eskom's plans and tariff proposals.
Jacob: 'It is a painful adjustment, but an unavoidable adjustment for a sustainable and secure future.'
Bongani Bingwa (Carte Blanche presenter): 'Jacob Maroga's argument that Eskom needs more money is a strong one until you read this confidential internal document, according to which if Eskom were to clean up its house, half of its financial problems might be solved.'
The confidential document is a business report of almost 300 pages.
It gives an overview of Eskom's performance up to June this year.
After it was leaked to Carte Blanche we in turn passed it on to trade union Solidarity and asked them for their analysis.
It states that in May, Eskom suffered a shocking 35 percent revenue loss in the residential sector, mainly as a result of energy theft and electricity meters that are reflecting free supply.
Solidarity's spokesperson, Jaco Kleynhans, says it's a management problem.
Jaco Kleynhans (Spokesperson: Solidarity): 'Why don't they put systems in place along with government and the municipalities to ensure that 35 percent of electricity isn't stolen? We can't see how that is sustainable over the long term.'
Transmission and distribution losses are a reality in the electricity sector, but 35 percent is way too high compared to the rest of the world, says Economist Reyno Seymore of the University of Pretoria.
Reyno Seymore (Economist, University of Pretoria): 'To give you an example of low income countries for 2005, the sub-Saharan African countries as a whole had transmission and distribution losses of 19 percent.'
The 35 percent does not include non-payment or accounts in arrears. This amounts to R2.8-billion, which has been outstanding for more than 60 days.
Soweto accounts for more than [R]1.8-billion of this.
Reyno: 'Eskom also said that they would like to increase the amount of free electricity that they provide. So the poorest of the poor will probably benefit by this. But again, this will be cross-subsidised by the consumers who actually pay their bill.'
Bongani: 'There's no question, South African consumers are going to be hard-hit by Eskom's tariff increases. In places like Soweto they've been dealing with this problem for years. Assisting residents here is the Soweto Electricity Crisis Committee.'
They simply reconnect electricity when Eskom cuts supply to defaulters.
Bobo Makoba (Soweto Electricity Crisis Committee): 'Some of the prepaid... we normally reconnect them to get their own free electricity system that was once installed in Soweto.'
Bobo Makoba says electricity is a right not a privilege.
Bobo: 'We are implementing the policies of the Freedom Charter. If you don't have electricity you don't have access to life.'
Bongani: 'If the authorities were to stop you from reconnecting, what would happen?'
Bobo: 'No, they'd be like perpetrating a revolution with the masses on the ground because I for one, I can't afford to pay electricity. Even if they could say, 'Bobo, go and pay R100' that would be a problem for me because I can't afford to pay electricity, I'm not working, I am unemployed.'
And so are the majority of the people the crisis committee assists.
Mary Moloko (Soweto Electricity Crisis Committee): 'Why do they treat us so badly? Why do they do this to us? They know we are poor people who do not work.'
Tebogo Lehloba (Soweto Electricity Crisis Committee ): 'If the rates go up, it doesn't make a difference because we still can't afford it.'
And while it's illegal, there could be an argument for what Bobo and his fellow re-connectors are doing.
Especially when the confidential business report reveals what some of Eskom's top ten clients are paying... or rather, what they're not paying.
Mozambique buys electricity from Eskom and that country's tariff increase since 2008 has been a mere 7 percent.
Billiton has had a tariff reduction of no less than 37.8 percent because its tariff is based on the price of aluminium.
Jaco: 'Now because prices came down of aluminium, now Eskom are getting paid less. They are actually selling it at a loss.'
According to the internal document Eskom's employment figures have been virtually static since the beginning of 2009. They have not employed the thousands they had promised. And due to the delay in filling the vacancies Eskom has under spent R255, 6-million on salaries. As a result R19,2-million was spent on overtime.
Bongani: 'For Eskom it's quite simple: to ensure a continuous supply of electricity they need to build more power stations. They say the only way to fund this is through the South African consumer.'
The knock-on effect will be widespread.
Reyno: 'You can expect inflation rate to increase by up to 0.8 percentage points. Now that will affect consumers in various ways. First of all, if you look at economic growth; economic growth will be dampened by up to 1.3 percent. Now what this implies is suppose we would have had economic growth of 3 percent, now it's only going to be about 1.7 percent.'
When he's not teaching economics at Pretoria University, Reyno Seymore does research for AFRINEM, the African Institute of Economic Modelling.
AFRINEM uses an internationally recognised model from the US to forecast the effect changes like the proposed tariff hike will have on the economy.
Reyno: 'The model that we use is basically a set of mathematical equations and that tracks any shock to the economy through the sectors and through all the participants.'
Bongani: 'So in a way you are able to track every jolt to the system?'
Reyno: 'Well, not every single, but 24-million linkages within the economy.'
Should Eskom's plans go ahead the construction sector will be hardest hit.
Reyno: 'There we can expect up to an 8 percent decrease in growth. Now this is very important since construction is creating production capacity. In other words our potential to grow in the future.'
Solidarity is most concerned about the mining industry, which had already seen 34000 job losses this year.
Jaco: 'Many of our marginal mines already indicated to Solidarity that they are extremely worried about the general increase in the cost of mining operations.'
Small business will also battle to survive says Johnny Killas, the owner of a coffee shop and bakery in Johannesburg.
Johnny Killas (Businessman): 'You have to pay your electricity otherwise they cut you off. So that do you do? You have to hold back on your other creditors, your suppliers - you know the people that you are buying your goods from - you have to hold them back now.'
His electricity bill has [more than] doubled in the 14 months he's been in business. It has gone up from R6000 to R13000 in four months. Johnny says he just can't absorb another increase.
Johnny: 'The store owners are going to have to pass this cost on to the consumer and inflation, I believe, is going to skyrocket because of this.'
But how would it affect a regular South African household?
Jaco: 'If you add all the five increases up, the 27.5%, 31.3% as well as the three 45% increases, you get a total increase of just more than 500%...'
This means that a household paying R1 000 per month in 2008 will pay R5000 a month by the end of 2012.
Jaco: 'I don't see that many South African households will be able to afford that.'
Bongani: 'The government has come out in full support of Eskom's electricity hikes. No one would argue... we need uninterrupted electricity supply, but will we get what we're being asked to pay for?'
Eskom claims we will. They say they are committed to what they believe is the only feasible option.
Jacob: 'We want to make sure that this committed projects go ahead because if they do not go ahead there will be a hole in the ability of Eskom to supply the needs of this country.'
E$kom
Looks like we are in for some interesting times.
